Not since the lead-up to the 2008 financial crisis has Denmark’s housing market faced a similar gap between supply and demand, according to the home finance unit of Nordea Bank Abp.
The number of residential properties for sale has plunged to its lowest in over a decade, Nordea Kredit estimates, citing new figures compiled by the website boligsiden.dk.
The pandemic has triggered a spike in searches for new homes, with ultra-low interest rates underpinning
The development is particularly “worrying” in the capital Copenhagen, Nordea analyst Lise Bergmann said in a client note on Tuesday. Bergmann notes that the number of houses for sale in Copenhagen has plunged 40% over the past year.
The last time so few properties were on the market was in 2005 and 2006. Back then, the correction was painful. Once prices started to fall in 2007 and the years that followed, Denmark found itself in a housing-market selloff that resulted in an historic price slump.
“One can hope that the housing market cools down in its most hectic corners,” Bergmann said. That might happen once the vaccine reaches more people and there’s less of a need to stay at home, she said.