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.
Access to the housing market for younger people with targeted easing of financing
In recent years, there has been a debate about access to the housing market, especially for the younger part of the population. This has led to proposals for easing home financing from various stakeholders, and one proposal is to be able to use pension savings to buy a home. Calculations indicate that this will only lead to a few new younger homeowners, while house prices rise for everyone.
Key messages
Why is it important?
The housing market plays an important role in the Danish economy, as the value of owner-occupied housing can influence household consumption and savings behaviour. Housing debt makes up the most significant part of total household debt. The level of debt and the value of the property used as collateral for borrowing have an impact on financial stability. It is therefore important to analyse policies that can change home financing and thus affect the housing market and indebtedness. Saving for retirement is also important for the individual and for the economy overall, as pension savings contribute to stable incomes for individuals and robust public finances.
"Easier financing for home purchases will increase demand for housing. However, if the number of homes remains unchanged, ultimately such a policy will not result in additional homeowners."
Main chart
House prices have increased and the share of first-time buyers has decreased since 2012
Note:
Other municipalities reflect a simple average of metropolitan, provincial, commuter and rural municipalities.
Source:
Statistics Denmark.