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125% increase in cost of Danish housing |
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Danish properties have risen between 125% and 128% in value over the past ten years creating the most major intergenerational redestribution since the second world war reports Information, an independent Danish broadsheet.
 "On the whole our analysis shows that property in the last ten years has been a better investment object than papers and savings" says Jens Christian Nielsen, chief economist at BRFKredit, a major mortage lender who have performed the analysis for Information.
But what has been a long econmic bonus for house owners has consequences for those who haven't managed to ride the housing wave.
Economist at Arbejderbev gelsens Erhvervsr¨d (an economic research body connected with the Danish labour movement) Martin Wendelin has researched the distributional consequences of the rise in house prices:
"The redistribution that has happened between different social groups and generations as a consequence of the development in house prices is the greatest since the Second World War. There has been an enormous transfer of funds from the younger generations who have been entering the housing market to the older generations who already are home owners. Furthermore the destance between owners and renters has also grown significantly."
Also the Social Research Institute has pointed out that the inequality in Denmark since 1992 is primarily caused by house prices.
"The increase is first and foremost caused by the increase in house prices which has caused a higher rental calue and thus a greater increase in the incomes of home owners who generally have a larger income than renters. The increasing inequality is thus to a lesser degree caused by income differences in the labour market or the redistribution via taxes and welfare" concludes research director Jens Bonke in a Social Research Institute report.
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