Colliers Denmark Market Report 2025

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RESIDENTIAL - COLLIERS MARKET REPORT 2025

Modest new construction benefits standing properties Since 2021, developers have had to adapt to a new real ity where property prices have been under pressure due to higher yield requirements and rising interest rates, while construction costs have soared. Even though inflation now seems under control, the cost of residential newbuilding is at a record high. These conditions are translating into limited new supply, which is most evident when analysing data concerning residential space (sq m) under construc tion. Here we see a drastic drop in new construction. If you compare the price of a newly built residential property with the total construction cost, for many development projects you will see that the price of the standing and completed asset exceeds the construction cost by a fine margin, which in theory would allow the developer to make a fair develop ment profit as well. It may therefore seem surprising that development activ ity has come to a standstill.

GRÅT SKÆRES FRA

Part of the answer lies in the way developers fund their projects. For the typ ical developer, external funding is key to getting a project off the ground. The

Residential construction activity has plummeted

3,000,000

2,500,000

2,000,000

1,500,000

1,000,000

500,000

0

14 15 16 17 18 19 20 21 22 23 24

Single-family

Row, chain or semi-detached

Multi-storey

Note: The figure illustrates the quantity of space (sq m) under construction for single-family housing vs. row, chain and semi-detached housing vs. multi-storey housing, Denmark. Source: Statistics Denmark, Colliers