Frontpage News 2013 Still difficult to...

Still difficult to sell homes

18 September 2013

Sales prices rise for the sixth consecutive quarter. Yet, there are still only as a few homes traded today as during the financial crisis. This is what new figures from the Housing Market Statistics show. 
 
"It is positive that the selling prices of particularly the apartment market are once again rising. This confirms the recent months more positive figures for consumer confidence, and the Danes’ beginning confidence in a real recovery in the property market," said Chief Economist at Bankers Niels Storm Stenbæk.
 
"The good times are however still not reflected in trading activity. Here, the development is the reverse and the housing trades are few," Stenbæk says.
 

Rising prices on the country's houses

Nationally, the square meter price for an owner-occupied dwelling rose with 3.3 percent in the second quarter of 2013 compared to the previous quarter and by 7.4 percent compared with the same quarter last year. This is the sixth consecutive quarter that sales prices of owner-occupied dwellings increase and the price level is now approaching pre-crisis levels.
 
Also the prices of houses rose in Q2, but compared to the same quarter last year, prices at the national level, however, were fairly un-changed, see Figure 1. 
 
Figure 1: Evolution of price per square meter of actual trades 
Source: Housing Market Statistics (the Danish Bankers Association, the Danish Mortgage Banks’ Federation, the Association of Danish Mortgage Banks and The Danish Association of Chartered Estate Agents) and the Danish Bankers Association’s calculations.
 
 

Property sales are still at a standstill

On the more negative side, the latest figures from the Housing Market Statistics show that there are still many homes for sale in the Danish market and trading activity remains low.
 
The supply of both owner occupied dwellings and houses with "For sale" signs in the window increased from Q1 to Q2 this year. In the second quarter, there were more than 40,000 houses and terraced houses and 7,500 owner occupied dwellings for sale, see figure 2.
 
 
Figure 2: Increasing number of homes for sale
Source: The Housing Market Statistics (the Danish Bankers Association, the Danish Mortgage Banks' Federation, the Association of Danish Mortgage Banks and The Danish Association of Chartered Estate Agents) and the Danish Bankers Association's calculations.
 
 
However, the number of traded houses and apartments has slightly risen from Q1 to Q2 (2013). But compared to last year's trading activity it has decreased, and the level is at the same as when the financial crisis really raged, see figure 3.
 
It is particularly the number of traded owner occupied dwellings which has dropped. Compared to the second quarter of 2012, trading activity for owner occupied dwellings has fallen by 6.8 percent, while the number of traded houses only declined by 0.6 percent.
 
"The low trading activity coupled with recent years’ massive increases in homes for sale have created an imbalance between the high supply and low demand," Niels Storm Stenbæk explains and continues: 
 
"To ensure the stability of the economic recovery and to trigger renewed growth, it is essential to restore the balance between supply and demand in the housing market."
 
Figure 3. Low trading activity in both the owner occupied dwelling- and housing market
Source: The Housing Market Statistics (the Danish Bankers Association, the Danish Mortgage Banks' Federation, the Association of Danish Mortgage Banks and The Danish Association of Chartered Estate Agents) and the Danish Bankers Association's calculations.
Joint Press Release on the Housing Market Statistics for Q2 2013
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