MR 2018

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Copenhagen Property Market Report 2018

In fact, a 2017 benchmarking report measuring cities’ ability to foster, attract and maintain talent, the “Global Cities Talent Competitiveness Index” (GCTCI) gave Copenhagen top-scores based on high quality of life, range of career opportunities and strong infrastructure. Heavy infrastructure investments On completion of the Copenhagen Metro expansion scheme, adding a circle line, “Cityringen”, and a line from Nordhavn (north harbour) to Sydhavnen (south harbour), scheduled for commissioning in 2019 and 2023, respectively, urban infrastructure will improve substantially, connecting the newly developed city districts with the rest of Copenhagen. Scheduled for commissioning in the second half of 2024, the new Copenhagen Light Rail along the Ring Road 3 corridor is believed to foster new urban growth areas, attracting long-term investments and influencing future settlement patterns. Triple-A rating Supported by Copenhagen’s status as the premier growth centre, Denmark is perceived as a safe-haven investment market thanks to strong framework conditions, reflected in Denmark’s AAA rating by S&P. Compared to other European countries, Denmark offers highly attractive risk-adjusted returns and low-volatility market rent levels. In addition, leveraged investors have the opportunity to boost effective yields due to low transaction and lending costs offered by the highly efficient Danish mortgage system. GDP and consumer spending almost at pre-crisis levels Danish economic growth momentum is strong: Danske Bank estimates Danish GDP growth at 2.0% in 2017, driven mainly by exports and consumer spending. Consumer confidence has almost rebounded to pre-crisis level, with 1.7% growth in consumer spending according to a Dansk Bank forecast for 2017. Strong momentum in the labour market, real wage growth and increasing housing prices are the main drivers of consumer spending. Inflation is estimated at 1.2% in 2017, up by 0.9 ppts on 2016, thus exceeding the anticipated level. As a result, we have seen a slight erosion of household purchasing power, curbing consumption growth. Skilled labour in short supply Employment levels have made a strong recovery, driven mainly by job growth. The Danish unemployment rate remains relatively stable, estimated at 4.3% in 2017. Companies have been known to report of difficulties in finding available skilled and qualified staff, with labour shortages therefore possibly threatening to dampen the economic upturn. Due to the low unemployment rate, qualified labour has become a sought-after resource, exacerbating wage pressure in several business sectors.

SEE MAP Copenhagen infrastructure

Copenhagen residents highly educated

24% Vocational education

23% Basic school (9-10 grade)

19% Short-cycle higher education

17% Long-cycle higher education

13% Upper secondary school

5% Bachelor/medium-cycle higher education

Note: Rounded figures. Source: Statistics Denmark