Housing price increases set new record

The days of double-digit housing price increases are probably over, say experts

Housing prices continued to rocket upwards in the second quarter, marking the largest increases on the housing market in 60 years.

A report from the Association of Danish Mortgage Banks found second quarter prices increased by 26 percent in one year, beating the 24.4 percent record set in the first quarter.

The report contradicts expectations that a decade of steady increases are petering out. Nevertheless real estate agents have noticed that the number of closed deals on apartments has fallen by 19.5 percent since last year.

Analysts still repeat their mantra that double-digit increases cannot be sustained and more modest increases should be expected.

'If we look at the overall picture, then we expect a noticeable slowdown in the market over the coming year,' said Christian Hillingsøe Heinig, an analyst for Danske Bank.

Even though the numbers of closed deals have fallen by 30 percent in the Copenhagen area, sudden price falls are unlikely, said Peder Harbjerg, an instructor at Århus Business College.

'It will only be temporary if price falls come in Copenhagen, because incomes continue to increase and the population grows,' said Harbjerg. 'It's just like the 1950s where every other Copenhagener came from Jutland, because Copenhagen is still a magnet for ambitious young people.'

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