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In recent years, the cost of buying an apartment in Denmark’s largest cities has increased significantly compared to renting.

From 2019 to 2023, housing costs for owner-occupied apartments more than doubled in eight out of the ten biggest cities, while rent levels only saw a moderate increase. This shift is mainly due to rising house prices and higher interest rates. In 2019, buying an apartment was cheaper than renting across all ten cities. However, in 2023, renting became less expensive than buying in all cities except Kolding.

The average price of owner-occupied apartments in Denmark increased by 20% between 2019 and 2023. Meanwhile, the average effective interest rate on new fixed-rate mortgage loans rose from 2.0% in 2019 to 5.8% in 2023.

These changes have made renting more attractive to home seekers, which is good news for rental property investors.

The increased demand for rental properties reduces the risk of vacancies and contributes to upward pressure on rent levels. Despite the impact of higher interest rates on rental property values, the primary driver of demand for rental housing remains demographic trends. For example, Copenhagen’s population is expected to grow by more than 5% by 2030, while the number of new apartment blocks under construction is at its lowest since 2014.

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Even if buying an apartment becomes more financially attractive in the future, population growth is expected to maintain the demand for rental properties and prevent a decrease in rent levels.