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Danish government refuses to intervene over soaring house prices

The government has decided against following advice from a guidance board suggesting it intervene in the country’s housing market.

Published: 21 September 2021 17:11 CEST
Danish government refuses to intervene over soaring house prices
Houses being built in the town of Vig in June 2021. Photo: Signe Goldmann/Ritzau Scanpix

The Systemic Risk Council (Det Systemiske Risikoråd) advised the government in June this year to act against consistently increasing house prices, specifically by limiting a grace period for instalments on mortgages given to people with high levels of debt.

The council is a government advisory panel which, according to its website, “seeks to prevent and reduce systemic financial risks that may put the economic development under stress.”

On Tuesday, the Ministry of Industry, Business and Financial Affairs confirmed in a statement that it would not follow that advice.

The decision was based on signs that the market is beginning to cool, business minister Simon Kollerup said in the statement.

Explained: Why is Denmark starting to apply the brakes to its economy?

“There are good signs and therefore no reason to intervene here and now while we are also seeing that the Danish economy is healthy,” Kollerup said.

“Household economies are robust and the banks are stable,” he added.

Although no intervention will be made at the current time, a close eye will be kept in the housing market according to the minister.

“I believe it is due caution as we now hopefully move from corona times to more normal times – including on the housing market,” he said.

TELL US: Share your ups and downs of buying property in Denmark

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PROPERTY

Can foreigners buy a summer house in Denmark?

Summer houses in Denmark are a hugely popular destination for those who want to vacation without going abroad. Can foreign nationals buy them in the same way as permanent homes?

Published: 12 February 2024 17:10 CET
Can foreigners buy a summer house in Denmark?

Many people in Denmark spend their holidays living in summer houses, properties in which residence is not usually permitted year-round.

Rules preventing permanent use are in place to ensure summer house areas remain recreational in nature; to limit new construction in valuable and uninhabited coastal areas; and to protect natural landscapes from wear and tear.

READ ALSO: Summer houses in Denmark: What are the rules and when can you live in them?

While renting is a popular choice, owning a summer house is also relatively common and may be a financially viable option, depending on your budget and plans for vacationing and use of the property. 

Foreign nationals who have lived in Denmark for less than five years are required to apply for permission to buy real estate with the Ministry of Justice’s Department of Civil Affairs (Civilstyrelsen). This also applies to Danes who have lived abroad.

Foreign nationals looking to buy property can face additional challenges, including minimum residency requirements and banks asking for a higher down payment on mortgages.

READ ALSO:

However, the Ministry of Justice’s Department of Civil Affairs (Civilstyrelsen) states that, for both permanent homes and non-permanent or seasonal dwellings like summer houses, foreign nationals can be given permission to purchase properties, even if they have lived in Denmark for less than five years.

The application for to acquire a seasonal dwelling (such as a summer house) can be found here. The rules can be explored in full detail here.

I have lived in Denmark for less than five years. Will my application be accepted?

Citizens of EU countries are normally exempted from residence requirements because of EU free movement laws. As such, citizenship and not residence or previous stay in Denmark is decisive and EU citizens can generally acquire real estate in Denmark.

However, if you want to buy a holiday home this does not apply and the five-year residence requirement takes precedence – regardless of whether you have EU nationality.

If you don’t meet the five-year rule, you can still be granted permission to buy a summer house if you are consider to have a “special connection” to Denmark.

This can take the form of close family in Denmark or professional, cultural or financial connections, or previous stays in the country. These are taken into account by the Justice Ministry when it reviews an application.

For companies, different rules apply to those for private individuals, and companies have more leeway to purchase property in Denmark.

However, companies are only allowed to buy holiday homes in Denmark for commercial purposes or to use them for year-round residence. These means rules for private individuals cannot be circumvented by purchasing the properties under a business.

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