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: