Lower interest rates ease housing market entry

A recent analysis by Realkredit Danmark indicates that entering the housing market has become easier for many Danes, thanks to lower interest rates and wage increases. The required income to buy a typical detached house is now within reach for average families in 91 of 98 municipalities, despite income requirements rising in half of these areas. This change is partly due to average wage growth, about five percent, outpacing the increase in income requirements. Nevertheless, income requirements have escalated more than wages in the past three years across 96 municipalities. The overall cost of purchasing and owning a home relative to disposable income, the ‘housing burden’, has risen since the summer of 2021. Capital area cities like Frederiksberg have the highest income thresholds, with a couple needing at least DKK 2.36 million for a house of 140 square meters.