Newsletter_Q2_2018_UK

Newsletter Q2 2018

pronounced so, when adjusting for changes in demographic composition.

purchasing power limitations than flats where the rent is determined subject to market rent. As a result, the long-term potential for rent increases is currently believed to be higher for flats subject to utility-value rent. The Copenhagen housing burden is usually calcu- lated on municipal level as the share of average disposable income spent on housing costs. However, this average account is typically flawed as it fails to take into account the substantial income level diffe- rences in various parts of Copenhagen. As a result,

The above-mentioned factors all impact on the resi- dential investment property market, where investors’ prime yield requirements have remained constant at 3.75% since 2016. However, stabilised yield requi- rements have dropped to a level below the 3.50% mark on properties where the rent is determined subject to utility value (det lejedes værdi). This mechanism largely ties in with the fact that flats subject to utility-value rent are less susceptible to

District

No. of house- holds

Household size Median dispos- able income (DKK)

Avg. unit size (sqm)

Avg. rent (DKK/sqm/ p.a.)

Avg. ownership (DKK/sqm)

Copenhagen K

15,641

1.95

366,075

95

1,875

50,500

Copenhagen V

13,722

2.08

327,500

86

1,725

44,500

Frederiksberg C

10,875

2.13

394,964

88

1,850

50,500

Frederiksberg

26,709

1.87

334,313

88

1,725

45,000

Copenhagen Ø

32,426

1.96

344,269

86

1,775

47,000

DATA BASIS

Copenhagen N

26,603

2.00

277,807

72

1,625

43,000

Copenhagen S

44,163

1.98

301,054

78

1,650

38,000

Copenhagen NV

19,695

1.93

304,997

68

1,550

35,500

Copenhagen SV

9,737

1.92

357,876

75

1,600

37,000

Valby

18,568

2.05

290,609

79

1,575

34,500

Sources: Geomatic, Statistics Denmark, NASDAQ OMX Nordic, Association of Danish Mortgage Banks and Sadolin & Albæk

Note: Share of disposable income allocated to housing costs.

District

Rental burden Ownership burden, fixed 1

Ownership burden, variable 2

1. Financing 80% 30-year fixed- interest mortgage with repayment scheme at a compound interest rate of 2.75%, as well as 15% bank loan at an interest rate of 5.00%. 2. Financing 80% 30-year variable- rate (F1) mortgage with repayment scheme at a compound interest rate of 1.50%, as well as 15% bank loan at an interest rate of 5.00%. Sources: Geomatic, Statistics Denmark, NASDAQ OMX Nordic, Association of Danish Mortgage Banks and Sadolin & Albæk

Copenhagen K

44%

40%

32%

Copenhagen V

47%

40%

32%

Frederiksberg C

42%

37%

30%

Frederiksberg

47%

40%

32%

Copenhagen Ø

46%

40%

32%

BURDEN

Copenhagen N

54%

46%

37%

Copenhagen S

48%

39%

31%

Copenhagen NV

44%

36%

29%

Copenhagen SV

39%

32%

26%

Valby

49%

37%

30%

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