Denmark’s Housing Market

“House prices continue to rise, particularly in regions with strong new credit creation (…) While a shock to the housing market would probably not pose an acute threat to the banking system, macroeconomic risks are substantial (…) The authorities are considering additional macroprudential measures to curb risks (…) A recently agreed reform of property taxation is a step forward (…) [IMF] Staff advocated pushing ahead with macroprudential and other policies to safeguard macrofinancial stability. Recommended measures span several policy areas. (…) Staff reiterated its call for putting in place a DTI limit and welcomed the SRC’s proposal (…)  The broad housing recovery and current low interest rates provide a conducive environment for reducing the tax deductibility of mortgage interest expenses and for further lowering, beyond what is currently planned, the value of the deduction for interest payments (…) Addressing longstanding housing supply constraints, such as strict zoning regulations, procedures for land development, and rental market regulations, can also help ease housing price pressures by improving the responsiveness of supply to housing demand (…) The authorities agreed that house price increases in certain areas called for vigilance”, according to the IMF’s latest report on Denmark.

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Posted by at 2:26 PM

Labels: Housing

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