Colliers Market Report Denmark 2023

5

Colliers Market Report 2023

Hotel Industri & logistik Retail Bolig Kontor l I ndustrial l i ics R Residential Office

Facing a new reality

If we were to caption the past 12 months, we could be tempted to resort to the popular saying, “The faster you rise, the harder you fall.”

On the threshold of 2022, most economic markets were soaring, and analysts and market players antic ipated another golden year for the Danish property market. COVID-19 was largely a problem of the past, growth was stable and interest rates historically low, and the budding signs of rising inflation were held to be a strictly short-term phenomenon. However, the Russian invasion of Ukraine prompted massive hikes in energy and food prices, and cen tral banks had no choice but to resort to substantial rate hikes to dampen economic activity and get inflation under control.

The Danish property market witnessed the effects in autumn: Several investors became wary, and transaction activity more than halved in Q3-Q4.

Are we anticipating a crisis that will never materialise? We are now facing a new reality where many ask themselves what kind of crisis we can anticipate. Compared to themost recent crisis in 2008, we see several similarities, but also differences: Employment levels remain high, private savings are substantial, and the banking sector better bolstered. Could it therefore be that we are anticipating a crisis that will never materialise? We are no doubt in the mid dle of a correction phase following recent years’ massive hikes in the property market, and we may well see an additional correction. However, unless we should plunge into deep recession with a sharp drop in economic activity, we at Colliers do not foresee a looming Danish property crisis with massive price declines, bankruptcies and forced sales. Our research indicates that we will have entered H2 2023 when transaction activity rebounds to nor mal. However, we also know from experience that it is impossible to time when exactly a market bot toms out. To await a crisis that may never materialise is a risky strategy, too. Opting for the right strat egy requires in-depth knowledge of the market, segments and locations that you as a property investor are interested in.

Colliers Market Report 2023 gives you a head start. We believe that transparency and collaboration pro vide the best basis for making the right decisions as well as sound investments.

Happy reading!

February 2023 Carsten Gørtz Petersen Partner and CEO (MRICS)

carsten.goertzpetersen@colliers.com

Accelerating success.