Housing market analysis of greater Copenhagen: housing shortage, urban development potentials and strategies

Energy Transition

27 Jan

Housing market analysis of greater Copenhagen: housing shortage, urban development potentials and strategies

Original title: Boligmarkedsanalyse for hovedstaden - Boligbehov, udviklingspotentialer og -strategier

Urbanisation and rising housing demand is a well-known phenomenon in many Western metropolitan areas. In Copenhagen, the population rose sharply from around 2006 and has been quite high ever since. This trend is expected to continue for many years to come.

Given the relatively strict geographic and regulatory supply restrictions in Copenhagen, housing supply has not responded adequately. This has fueled a gap between supply and demand resulting in a rapid and quite unstable housing price development. This implies at least two socio-economic challenges.

First, the limited supply means that only the relatively wealthy citizens can afford to live in the city, which may result in a loss of potential jobs and growth. Second, the price fluctuation may cause random redistribution of prosperity and, in worst cast, financial instability as seen over the financial crisis in 2008-09.

We have analysed the urbanisation and housing market development in the Capital Region of Denmark: the consequences, the growing need for new dwellings in the future, and the potential urban planning strategies and barriers.

The results of our analysis are threefold:

Housing supply in the region needs to grow by 5,000-9,000 dwellings per year for the next 20-30 years. This includes approximately 110,000 dwellings until 2035 and more than 150,000 dwellings until 2045. In particular, there will be a large demand for small apartments for young people in the city centre.
Urban planning strategies could provide approximately 270.00o dwellings – more or less equally distributed between the city centre and the suburbs.
A number of regulatory and capacity barriers must be overcome. In particular, we find major conflicts of interest between different municipalities in the region, between municipalities and other public actors; and between public actors and private developers.

The study is carried out in collaboration with Kuben Management and commissioned by the Danish Ministry of Transport, Building, and Housing.

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