Newsletter Q3 2017 UK

Newsletter Q3 2017

MARKET UPDATE Q3 2017

The Danish investment property market – propelled by the perfect storm

By Peter Winther, Partner and CEO, Sadolin & Albæk

In today’s Danish property market, it is fair winds and plain sailing all-round. Economic and employment growth momentum is fairly strong. As a result, commercial vacancy rates are downtrending, and rental prices slightly uptrending. In the housing market, rental prices are seeing a fair increase, too. In addition, interest rate levels remain historically low. Central bank initiatives have vastly increased the amount of liquidity in the global markets, and all of this cash is now looking for investment opportunities that retain their value and maybe even produce certain returns. It is hard to imagine better framework conditions for property investments; It is the perfect storm, only turned upside down, and the fact that the financial sector has not yet pulled all stops when granting credit is actually the only factor that prevents

”Perfect storm” is a concept commonly used to describe an incident where a rare combination of circumstances seriously exacerbate a situation.

property prices from skyrocketing completely off the scale.

Without a banking crisis, no property crisis This being said, we believe that the fair winds will slacken at some point or another. Within the next 12, 24 or 36 months, the market will turn and property prices will come under pressure. The trigger may be an inexpedient rate hike to a level, which is not sufficiently supported by underlying economic

2 Published by Sadolin & Albæk. Reproduction or citation only with acknowledgement of source. Contact: Mette Lundorf, Head of Communication & HR +45 22 13 42 80 mlu@sadolin-albaek.dk