The debt and wealth data for 2017 published recently by Statistics Denmark show that savings exceed debt by a wide margin. The wealth of an average Danish household exceeded debt by DKK1.975m in 2017, up almost DKK77,000 on the year before.
DKK 1,5 million
Wealth tied up in housing
The other main component of wealth is pensions, which have grown rapidly in recent years. The average household’s pension wealth grew by more than DKK34,000 in 2017 to just over DKK900,000. This means that, even if we ignore pensions, Danish households still have net wealth of around DKK1m on average.Louise Aggerstrøm
Private Economist, Danske Bank
Holding onto their money
While pension savings look set to grow more moderately, we expect rising incomes and further strengthening of the housing market to continue boosting household wealth in the years ahead.
We are not seeing any serious signs of mounting debt. Average debt fell by DKK3,600 from 2016 to 2017, which does not sound much but needs to be seen in the light of debt normally increasing during an economic upturn such as the one we are seeing now. This suggests that Danes are still very wary about loosening the purse strings in the wake of the financial crisis in 2008.
Home equity hit hard by financial crisis
Some of this caution can be explained by most homeowners still having less equity than in 2007 despite the rise in housing prices. This means that many still do not have scope to increase their borrowings.