Denmark: Housing

September 28, 2019
By GoinGlobal

Denmark has a housing shortage. Residential construction has not kept up with a growing population. The problem is especially acute in cities such as Copenhagen. A recent analysis estimates that, in order to keep up with demand, housing supply in the region will need to grow annually by 5,000 to 9,000 dwellings for the next 20 to 30 years. In particular, student housing in the city center is in very short supply.

Denmark offers many different types of housing for both rent and sale, as shown below:

  • Apartment (lejlighed): a rented housing unit that occupies only part of a building.

  • Owner-occupied home (ejerbolig): This can be an apartment or a house that has been purchased.

  • Housing cooperative (andelsbolig): Where, instead of owning just an apartment, a resident owns a share of the entire building and financially contributes to its upkeep.

  • Link houses (rækkehus): A type of private house that shares walls with other houses.

  • Single-family house (villa): A building not attached to any other building, often with walled yards and gardens. Villas are typically purchased, not rented.

  • Room (værelse): A rented single room in an apartment or house shared with others. This type of housing is most popular with students.

  • University housing (studiebolig / ungdomsbolig / kollegie): Students may have the opportunity to rent housing on a university campus similar to a college dorm room.

Some companies provide housing for their foreign employees. Most foreign nationals moving to Denmark choose to rent their housing, as purchasing property in the country can be difficult. In general, it is easier to find housing outside of the major cities of Copenhagen and Aarhus. Prices tend to be higher in the metro areas.

Renting

One can rent either from a private landlord or through a housing association (boligselskaber). Denmark has many housing associations that offer a wide variety of accommodations, ranging from apartments to single-family houses. Rental rates are typically less expensive for public housing, but the waiting lists are long. More information can be found on the National Federation of Housing Associations’ (Boligselskabernes Landsforening) website (English, Danish).

The law does not require a lease in writing for private rentals, but it is always recommended to obtain one. Subletting is very common. When renting in Denmark, you are generally required to live on the property for at least 180 days out of the year.

An English translation of the standard rental contract for a private lease (lejekontrakt-for-beboelse) can be downloaded from the website of the Ministry of Housing and Urban Affairs. New tenants must register their addresses with the National Registration Office. When signing a lease, foreign nationals should look out for the word nyistandsat (refurnished) in the text, which can mean they will be obligated to return the property to brand-new condition before leaving.

It is also important to keep in mind that in Denmark, costs for properties are often calculated by size rather than by number of rooms, and dwelling size is determined by measuring the outside dimensions of the unit. Therefore, an 80-square-meter (861-square-foot) apartment with only two rooms will cost roughly the same as one of the same size with four rooms.

Most rents are regulated in Denmark; only rental housing built after 1991 is exempt from rent control. With that being said, rents in Denmark can vary widely. It is important to know the average rental rates in your area before signing a lease to make sure you are not paying too much. You can obtain this information from the online rental checker website TjekDinLeje (‘Check your Rental’) (Danish).

Finnish real estate start-up Blok’s list of the 15 most expensive Nordic cities to buy an apartment includes four Danish cities. Copenhagen ranked third after Oslo, Norway, and Stockholm, Sweden. Aarhus was ranked the eighth most expensive Scandinavian city in which to rent, Aalborg was ranked 12th, and Odense 14th.

Average Monthly Rental Prices in Selected Cities in Denmark (in DKK)

Municipality

Average Monthly Rent (DKK) for one-bedroom apartment

Average Monthly Rent (DKK) for two-bedroom apartment

Aalborg

2,989

5,410

Aarhus/Arhus

3,637

7,762

Copenhagen

4,702

11,030

Esbjerg

2,718

5,024

Horsens

2,624

4,774

Kolding

2,770

4,967

Odense

3,030

5,472

Randers

2,303

4,034

Vejle

2,836

5,245

Source: BoligPortal.dk

Classified sections in local newspapers, such as The Copenhagen Post and the Danish-language Den Blå Avis, and real estate agencies are good sources for finding housing. You can also ask your municipal housing authority if they have any subsidized apartments available. Some helpful websites that list available properties for both rent and sale include:

Typically, a deposit of up to three months’ rent is required to lease an apartment. While the exact terms of a lease can be negotiated, a tenant must give at least three months’ notice before terminating a lease. Utilities, such as heating, water and gas, may not be included in the cost of rent.

Buying

It can be difficult for foreigners to buy real estate in Denmark. Foreign nationals who are not from an EU/EEA country and who have not previously resided in Denmark for at least five years need authorization from the Ministry of Justice (Danish, some English) in order to purchase property in Denmark. EU/EEA citizens do not need permission and need only to state on the deed of sale that the property will be used throughout the year.

With that being said, special restrictions do exist on foreign ownership in some regions, particularly in coastal areas. These are designed, in part, to protect desirable real estate from foreign second-home owners.

The average price per square meter for an apartment in Denmark is 28,109 DKK. The average price for a terraced house is 13,673 DKK per square meter. However, prices vary throughout the country. In Copenhagen, house prices have climbed by 3.4% and apartment prices by 8.7% over the past year.

Average Prices per Square Meter (m2) by Municipality

Municipality

Price Per Square Meter (in DKK) Apartment

Price Per Square Meter (in DKK) House

Aalborg

20,958

13,860

Aarhus/Arhus

33,201

22,377

Copenhagen

40,803

35,095

Esbjerg

16,066

11,118

Horsens

13,455

12,222

Kolding

14,124

12,070

Odense

20,368

15,628

Vejle

19,200

11,958

Source: Boliga

Most of all property purchases in Denmark are done through a real estate agent, the vast majority of whom are members of the Danish Association of Chartered Estate Agents (Danish, English). Hiring a lawyer to do the legal work involved in buying a property is also recommended. Once a purchase agreement is signed on a property, the buyer is expected to pay a 5% deposit based on the purchase price. You can normally obtain a mortgage for 80% of the home’s value.

The seller will usually provide the buyer with a copy of a home buyer’s (or property) report describing the physical condition of the property and any defects present. This report is not required, but is needed for a deed transfer. If the buyer does not receive a report, the seller can be liable for any defects or damages for the next 20 years. The seller is required to provide an electrical surveyor’s report which details energy expenses.

Municipalities maintain a registry of residents; when moving, residents are required to notify municipal authorities. This can be done online at Borger.dk or with forms obtained from a local post office.

Transaction Costs when Purchasing Property in Denmark

  • Solicitor’s fee – 0.1% to 0.5% of the property value (negotiable)

  • Registration fee – levied at 1,400 DKK, plus 0.6% of the purchase price, paid at the Land Registry

The real estate agent’s fee is negotiable, ranging from 0.5% to 2%, depending on the value of the property and administrative costs. It is normally paid by the seller.

Denmark levies a property tax of 1% of the property’s value up to 3,040,000 DKK, and 3% of the value over that amount. The property value tax is levied as part of income tax.

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