The Danish Property Market

Autumn 2022

We live in turbulent times. Uncertainty about where the international economy and financial markets are headed has increased significantly in 2022 due to external factors; war in Ukraine, global supply problems, accelerating inflation, and rising interest rates.

The unstable situation also affects Denmark, where the uncertainty has led to a drop in business and consumer confidence. However, the picture is not clear-cut. GDP grew more than expected in Q2 2022 and current economic activity is at a high level. Forecasts expect GDP growth of around 3.0% this year. Growth next year is expected to be low but not negative.

While there is no clear evidence that economic activity is falling, the picture is quite clear as far as inflation is concerned, which is now the key problem for the economy. It affects households' consumption possibilities and asset values, companies' earnings, interest rate developments, property markets, etc.

In the last edition of “The Danish Property Market” we wrote that, in the short term, we expected a wait-and-see attitude among investors until it became clearer in which way the situation would develop, but that we were cautiously positive about the Danish property market in 2022. We are still of this opinion. After a brief slowdown in Q1, investment activity rebounded strongly in Q2.

  • Property transactions amounted to a record high of DKK 25 billion in Q2.
  • Investors’ focus is primarily directed at residential and industrial properties.
  • Rising interest rates and uncertainty has resulted in gradually and slowly rising yields.
  • Inflation gives landlords the opportunity for high rent increases.

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