Newsletter_Q2_2018_UK

Newsletter Q2 2018

Affordability index

Stockholm 1 96

Oslo 95

Copenhagen 100

London 154

Note: Relative housing burden in the rental market based on questionnaire- based poll, index 100 = Copenhagen; higher values indicate heavier housing burden relative to Copenhagen housing burden. 1. The Stockholm rental market is governed by strict regulations and it therefore makes no sense to compare it with Copenhagen on a one-to-one basis. In the ownership housing market, the housing burden is markedly heavier in Stockholm

Amsterdam 127

RELATIVE HOUSING BURDEN

Munich 111

Paris 133

Sources: Numbeo and Sadolin & Albæk

the housing burden is exaggerated in high-income districts whereas the opposite is the case in districts with low average income. In the rental market, housing costs are calculated for units subject to effective market rent in the districts in question. Ownership housing costs are based on average selling prices, calculated as costs relating to financing, property taxes and other owner expenses, allowing for deduction of interest expenses. By including income data from various Copenhagen districts, it is possible to achieve a more nuanced housing burden account. We retrieve data on various income groups based on postal code via Geomatic. On this basis, we are able to deduct the median income in individual districts. In order to obtain the

best possible basis for a comparative analysis of the rental and ownership markets, we discount the lowest household income brackets (DKK 0-299,000 p.a.). The housing needs of residents in these income brackets are largely assumed to be covered by non-profit housing, student housing and housing subject to cost-regulated rent (rent control). Our housing burden calculations therefore show a level that is far below the level arrived at in an average account calculation. In addition, it is impor- tant to bear in mind that even at a heavy housing burden, excess income is substantial in absolute terms. In Copenhagen V, for instance, excess house- hold income after housing costs is approximately DKK 168,000 annually, corresponding to DKK 14,000 monthly.

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