Colliers Market Report Denmark 2023

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Residential - Colliers Market Report 2023

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Rent indexation

dential units – offering low, cost-regulated rents – are hard to come by without the right connections. Finally, the rise in interest rates has rendered it a costlier affair to enter the market for ownership housing. Despite limited alternatives, the financial reach of ten ants potentially makes it a risky business to raise the rent. Mainly in districts and neighbourhoods with a lot of new builds, and therefore with an increased supply of new dwellings, it may prove difficult to raise the rent without losing tenants to competing newbuilds that have a strong incentive to attract tenants. In conclusion, it is not certain that market rents move in consistent ways. Rather, they will be determined by indi vidual property qualities, including location, just as com petition will be key.

In some urban areas , the competing res idential supply largely determines if rental growth is long-lived, whereas the tenants’ ability to pay rent increases is more rele vant in locations where the rental-housing burden is relatively higher. Although spe cific towns and cities may be viewed over all, there will be variations in competing supply not only across individual districts but also across housing types.

The landlord is required to consider the competitive situation and the tenants’ ability to pay the higher rent resulting from future rent adjustments

Average rental-housing burden

40%

Copenhagen

38%

Hillerød

36%

34%

Odense

Horsens Silkeborg

Køge

Aarhus

32%

Roskilde

Kolding Randers Aalborg

Vejle

30%

28%

1.0

1.5

2.0

2.5

3.0

Competing supply

Note: Housing burden denotes the ratio between housing cost and income, in this context the average disposable household income of residents in terraced housing and apartments built post-1992. Rent levels based on average values for residential rental properties subject to open market rent. Competing supply includes both current supply, future years’ anticipated new supply and accessibility of ownership housing market. Value 3.0 indicates strong supply-side competition. Source : Statistics Denmark, Colliers