Should You Buy a House in Denmark in 2024?

Hey - Today, I’ll tell you whether now - in 2024 - is a good time to buy a property in Denmark or not. If you're thinking about buying a house or an apartment, this video will help you make a better informed decision.

And Straight-on, my take is:

• Yes - It’s probably a good time to buy. I think that so long as the economy keeps strong, prices won’t go down. If you’re buying for the medium to long-term, go for it.
• Mind - The future is always full of uncertainties. But I’ve a lot of confidence in the market now that we’d interest rates climbing and higher taxes kicking in and prices still went up.

In the rest of the article I’ll explain this take in more detail. And - I’ll tell you a bit of what I’ll be personally doing, as there’s more skin in the game for me this time.

You can see my gigantic guide on buying a house here.

If you’re new here, my name is Mario - and I’m passionate about financial independence. In this channel I help people living in Denmark to invest well, save money and live a rich life.

So…

• In 2022-23, we’d interest rising to up to 5%. Now they’re down to 4%, but that’s 4x higher than they were on the eve of and during the pandemic. That cooled down the market, but it picked up again.
• In 2024, we’d the new property taxes kicking in. They made living in apartments more expensive - to the tune of a few thousand kroner per month at least. Every expert predicted the market to take a big hit after that. Things cooled down in Jan and Feb, but prices are higher now than in December 2023.

You can see this story play out in the sqm price graph, as here:

You can see the bigger dip and the smaller dip. But the story is still that prices are going up again.

Keep in mind, it costs considerably more to buy something now in running costs vs. a few years back. 4% is substantially more than 1%, and if you add the extra taxes is ouch ouch. So what keeps the market going then?

It’s the fundamentals.

Housing Fundamentals

• (1) Strong Economy
  • Denmark has weathered covid relatively well, the government and household finances remain relatively solid and there’s a booming job market with wage growth. This is all important as there's high correlation between economic strength and asset prices such as real estate.
  • In cities like Copenhagen we’re also receiving thousands of highly paid expats and that also makes up for a boost in demand at the mid and high end of the market.
• (2) It Is Still "Cheap"
  • In comparison with other cities in Europe. (Show Numbeo data b-roll that is this video’s folder in GD.). Other Scandinavian cities such as Oslo, Stockholm and Helsinki are more expensive. France and Switzerland, and other places like Amsterdam even more.
  • For example -- sqm price in Copenhagen is around 56.000kr. vs. 59.000 kr in Hamburg and over 69.000 kr. in Stockholm.
  • That said, the gap is closer now than it was a few years back.
  • You could argue that the Denmark numbers are artificially low — that because we count corridors, etc. as part of the apartment our numbers should be higher. And I would say, yes - you’re right, but if we take 10% more increase we’re still not in the Europe Top 10.
• (3) Demand / Supply Imbalance
  • It's crazy expensive to rent in Denmark. At least when you can't get a good rent-controlled deal, more in the video here.
  • You often (very often) have a better deal by owning a place vs. renting from a cashflow perspective. That, depending on how high your rent is now, and what type of loans you’ll get access to.

With that, you can say that there's a strong base for prices to stay where they are. Nobody expects another big boom, but it would be strange for them to go down -- at least to go down big.

(And, in that context, would you stop from buying now if prices would fall 5% in the next two years? If you factor everything in the calculation, probably not?)

If you want to learn more about buying an apartment in Denmark, or overall how to achieve your financial independence and here - hit that subscribe button below and you'll get access to my future videos. I post new videos every week.

My Recommendation

I can tell you what I’m doing. In 2024, I’m looking for a new and bigger home. I’m looking leisurely - I know what I want, and if something that fits my (narrow) criteria I’m ready to buy right now.

But I’m not in a rush. I can live here for 1, 2, 3 more years and I’m fine with it. (Which, always, it’s a good situation to be in. I know).

But if the right place pops up, I’m game on.

Because of this, I’ve been looking closer to the market than the past years. Anecdotically:

• I’ve seen that some of the places I was interested on sold in a snap: many off market (so, were never advertised for sale) and others in just a couple weeks tops.
• I’ve seen two neighbors in my building selling their apartments in less than a week (and off market). This is a big contrast vs. even last year, where we’d some apartments with exactly the same layout on sale for months.

To wrap this section up - It sucks to buy at 4% and with higher taxes, but, alas, I just decided to accept that’s the way it is and move on. (And I guess many, many others have done the same thing).

When Not to Buy

While I’m looking to buy right now, I’m aware that prices are high and that we could have a correction or prices falling in the coming years. I don’t think so, but it can well happen.

In my case, I’m looking for a medium to long-term home. It’s three years minimum, five years plus likely.

While I don’t know what will happen this or next year, I’m confident that over five years or more prices will be higher because of the fundamentals I just told you about.

If you’re looking for a short-term buy - say, one or two years, I would be wary. You can get lucky, but the risk of a one-off crash as we’d in the 2022 or even earlier this year is possible. You don’t want to be stuck on that.

That’s it from me today. What are you planning to do on housing? Let me know in the comments. Thanks for watching!