Bubble trouble: Housing market across Denmark faces dramatic change

There is little doubt that since the recent financial crisis ended, housing prices in Denmark have skyrocketed to a point when talk of ‘housing bubbles’

have once again come to the fore. But those discussions could very well dissipate soon. In collaboration with the Danish financial supervisory authority Finanstilsynet, the Business Ministry has moved to severely restrict banks and credit institutions from offering the types of housing loans that don’t have fixed interest rates and monthly instalments. In future, the more ‘risky’ interest rate and repayment-free mortgages must only constitute 15 percent of the mortgage lending portfolio of banks. The impact could be overwhelming, according to the banks. Some experts contend that the state’s effort to put a damper on the housing price spike is too stringent and could lead to a downward spiral.

- CPH Post -
2. 10. 2017