The government has revised its expectations for housing prices in 2024, forecasting a slightly less significant increase than previously anticipated. In the latest economic report published on Friday, it is estimated that home prices will rise by 2.7 percent over the year, down from the 3.2 percent predicted in May.

According to the report, the rise in housing prices is attributed to increased incomes and high employment levels. Additionally, gradually declining interest rates are helping potential homebuyers afford larger loans. Despite these positive elements, the current expectation is that the increase in housing prices will be more modest than initially believed. For the upcoming year, the government predicts a 3 percent increase in prices.

The market for condominiums (owner-occupied apartments) is showing a somewhat different trend. Despite concerns that the higher property taxes introduced at the beginning of the year may suppress prices, the condominium market has started to stabilize in the second quarter of the year. This indicates that the risk of a sharp price decline has reduced, according to the report.

Brian Friis Helmer, a private economist at Arbejdernes Landsbank (The Workers’ Bank), adds that the unexpected developments in the condominium market are closely tied to the overall economic situation in the country. He points out that although the pace of the labor market is slowing down, employment remains at a record high, unemployment is low, and wages continue to rise. Collectively, these factors contribute to a positive impact on the housing market.