A double whammy has hit the Danish capital of Copenhagen in the form of property devaluation and a baby boom. Nearly every property in the capital has lost value in recent months, but many families continue to grow, adding more stress to their lives because they cannot afford to move house to cheaper areas.
According to estimates from Nordea Bank, Copenhagen’s housing market is in such a dire condition that every third apartment in the city would sell at a loss if put on the market today. The capital is considered a barometer for property values across Denmark, a status that has prompted many homeowners across the country to hold off on selling to see if the Copenhagen market can rebound.
In the meantime, the Politiken reports that thousands of properties in the city that were bought at inflated prices during the housing bubble have lost much of their original value. Property economist Troels Theill Eriksen of Nordea says “A lot of Copenhageners are now stuck in a frozen situation where they simply just can’t afford to sell.”
For parents who thought the good days would last forever, their newborn babies will now be forced to tough it out in their current accommodations. With at least 32 per cent of Copenhagen apartments selling at less than their purchase price, there is little incentive to sell out and move to cheaper climes in the suburbs or countryside. Worse still, the capital is facing a major crisis of a lack of space for these incoming young students at daycare centres and schools.