Colliers København Delrapport 2023 UK

RESIDENTIAL

Market for rental housing remains red-hot

4,608 residential units

However, recent years’ brisk newbuilding has gradually served to restore the balance, reducing the total accumula- ted housing shortage. As from 2022 onwards, some 12,000 units in multi-storey buildings have been completed, corre sponding to approximately 1.1 million sq m space in multi- storey buildings in Copenhagen and environs. However, the construction sector faced headwinds in 2022, when construc tion costs as well as financing costs moved higher. Mainly the non-profit housing sector and small market players proved susceptible to the change in market conditions, resulting in several bankruptcies and a suspension of development pro jects. Nevertheless, the pipeline of new Copenhagen resi- dential development schemes remains strong, albeit con struction activity is expected to slow in 2023. Residential newbuilding has involved mainly large resi- dential units due to the former municipal plan requirement aimed at promoting family housing, with 75% of units in res idential newbuilds required to have a minimum size of 95 sq m. However, the rule was eased in 2020, and today only 50% of units in residential newbuilds must comply with the min imum size requirement. Because of the amendment, recent years’ newbuilding has catered more to the needs of stu dents and single households, who generally demand smaller residential units. Copenhagen continues to grow – and developers and inves tors still have a stomach for new construction, although exer cising more prudence. Copenhagen continues to offer land for residential newbuilding. A great many plots are located in out-of-town locations, but some are also found in more cen tral districts only 3-5 kilometres from Rådhuspladsen The Copenhagen residential market has long witnessed massive demand for ownership and rental housing alike, but also a supply/demand imbalance, with demand greatly outstripping supply.

completed in 2022 (Q1-Q3)

379,270 sq m residential completions in 2022 (Q1-Q3)

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79 sq m Average residential unit size

84.20% Tenant share

4.78% Average residential vacancy rate

Note : The three bottom figures denote average data on multistorey apartment blocks in the City of Copenhagen.

Source : Colliers, Statistics Denmark.