The apartment prices in Copenhagen have experienced a significant drop, with prices falling by a whopping 2.9 percent from April to May. According to a new report from Homes Boligbrief, this equates to a price drop of approximately 120,000 kroner for an average 80-square-meter apartment in the Municipality of Copenhagen. Calculations made by Euroinvestor based on Boligsidens Market Index show a significant decline in property market prices.
Chief analyst at Danske Bank, Bjørn Tangaa Sillemann, states that it was almost inevitable that apartment prices would have to fall under the current economic conditions. He points to increased property taxes and rising interest rates as important factors that have pushed housing expenses up. “This means that one must spend a historically large portion of their income on housing expenses if they want to buy an apartment in Copenhagen. Since interest expenses are not decreasing, the price must adjust,” explains Sillemann.
The price drop follows a period of price increases in the second half of 2023, where many buyers secured apartments in Copenhagen before the property tax reform came into effect on January 1 of this year. Danske Bank predicts further price declines throughout 2023 as the market continues to try to find a balanced level where both buyers and sellers can meet. “Sellers need to adjust prices down since many buyers and sellers have difficulty agreeing on a price, simply because the apartment is often worth more to the seller than to the buyer, who has to pay the new, higher tax,” notes Sillemann.
This is clearly illustrated by the difference between asking prices and actual sale prices in the capital. In April, apartments were listed for an average of 64,409 kroner per square meter, while the actual sale prices ended up at 51,632 kroner per square meter. This represents a significant adjustment of 19.8 percent or over one million kroner for an average 80-square-meter apartment.
Nationally, however, the picture looks brighter. House prices rose by 0.1 percent from April to May, and over the past year, house prices in the Capital Region have increased by 8.0 percent. During the same period, apartment prices in the Municipality of Copenhagen have increased by 4.7 percent.
According to a new forecast from the economic councilors, house prices are expected to rise by 2.8 percent this year and a further 2.7 percent in 2025. For the period 2026-2030, an average annual increase of 4.6 percent is predicted.