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2 Apr 2019 – Insights

Danes dream of buying a holiday home all the while price increases are waning

A new analysis from Realkredit Danmark shows that it has become much cheaper to buy a holiday home although the prices of Danish holiday homes have increased in recent years. In a new YouGov survey, almost half of the respondents answer yes or maybe to the question of whether they would like to own a holiday home in the future.


Headwind expected to continue

Lenient lending rules, the fact that it has become easier to use holiday homes as a year-round residence and an increased tax deduction on letting along with economic progress have boosted the market for holiday homes. For the first time in many years, the prices of Danish holiday homes increased more than the prices of single-family houses in 2018. 

The headwind for Danish holiday home owners is expected to continue in 2019. But price growth will be slower. 

We expect prices to increase by 1.5-3.5 percent this year. It is still a solid price increase but smaller than in 2018. For those who are considering buying a holiday home, it is positive that price increases seem to be waning. There will always be geographical differences. The market for holiday homes in North Zealand, which has been at the forefront in terms of both price developments and selling periods, may lose its leadership position this year. The slowdown in the Copenhagen market for owner-occupied flats and uncertainty about future price developments may influence holiday home areas that appeal to people in Copenhagen. But we do not believe this will mean price drops in North Zealand.

Christian Hilligsøe Heinig

Chief Economist, Realkredit Danmark




Some 50 percent cheaper to buy a holiday home
Despite the recent years’ increases in holiday home prices in Denmark, the analysis from Realkredit Danmark shows that the price level for holiday homes is 15 percent lower than at the latest price peak in 2007, even when lower interest rates and rising disposable income are taken into consideration.

“If we also take into account that interest rates are much lower today and income is higher, it has actually become some 50 percent cheaper today to buy a holiday home compared with the level in 2007. We actually have to go 20 years back in time to find a time when financing costs relative to disposable income were lower than today. There is no doubt that it has become financially more affordable for more people to buy a holiday home today and that is of course positive for the market,” says Christian Hilligsøe Heinig.





The dream of a holiday home

A new YouGov survey conducted in collaboration with home and Realkredit Danmark indicates that Danes have a very soft spot for holiday homes these years. Almost half of the respondents who do not already own a holiday home answer yes or maybe to the question of whether they would like to own a holiday home in the future.

If we take a closer look at the figures in the survey, especially younger people would like to own a holiday home. Nearly three in four persons aged 18-29 answer yes or maybe when asked if they would like to own a holiday home. When we get older, we dream less of owning a holiday home, but still, about half of the persons aged 50-59 would like to own a holiday home. 

It is interesting that young Danes are so positive about owning a holiday home sooner or later. It has often been argued that the holiday home market could be challenged because new generations would rather travel and experience the world. One explanation for the differences between the young and older generations in the YouGov survey may be that more people of the older generations already own a holiday home. Another explanation could be that when people get older, they tend to have a clear idea of their lives, finances and plans for the future, while keeping all options open when they are young.

Christian Hilligsøe Heinig

Chief Economist, Realkredit Danmark

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