See also
See the press conference and related publications
Analyses focus on current issues of particular relevance to Danmarks Nationalbank’s objectives. The analyses may also contain Danmarks Nationalbank’s recommendations. They include our projections for the Danish economy and our assessment of financial stability. Analyses are targeted at people with a broad interest in economic and financial matters.
Big shocks to the economy have fuelled house prices
Recent years have seen unusual shocks to the economy that caused fluctuations in house prices. First came the corona pandemic, followed by a period of high inflation and the highest interest rates seen in decades. Understanding the dynamics and gaining a better understanding of how these shocks have affected the housing market is essential for assessing economic development, among other things. The effect of the shocks to the economy are now estimated to have roughly translated into house prices. In absence of new shocks to the economy it is expected in the coming years, that future developments in fundamental factors such as interest rates and incomes will drive the development of house prices.
Key messages
Why is it important?
It is important to understand the driving forces behind the housing market development in recent years, as the housing market both reflects and influences the development of the Danish economy. Fluctuations in house prices affect household wealth and spending power and can test the resilience of credit institutions. A solid understanding of the driving forces behind developments in the housing market is therefore central to the overall assessment of developments in the Danish economy and macroeconomic and financial stability.
Main chart
House prices have risen since the beginning of 2023, especially nominal prices
Note:
Real house prices are deflated with consumer prices and all series are seasonally adjusted. House prices are from Statistics Denmark until Q1 2024 and are extended with data from Boligsiden in Q2 2024.
Source:
Statistics Denmark, Boligsiden, Macrobond.