House prices in Denmark recovered strongly during the first half of 2010, but came to a standstill during the second half due to weaker economic growth. Prices rose by an average of 2.6% every quarter between the fourth quarter of 2009 and the second quarter of 2010. While prices of flats fell slightly in the third quarter of 2010 they were still 6.6% higher than the same time in 2009.
The present property cycle began in 1993 with prices peaking between 2006 and 2007 by which time the price of a single family home had increased by almost 250%, while flats had increased by 360%. Since then prices have declined by just under 30%. The cost of buying a property in Denmark is relatively low at 1.3 to 3% of the property value, and rental yields here are between 4.2% and 5.7% and taxes on rental income are moderate.
Denmark enjoys one of the highest standards of living in the world and is one of the few countries that contribute more than 0.7% of its gross national income to foreign aid in less developed countries. Principal exports are food products and machinery with the United States being its largest non-European trading partner.
The economic crisis has affected Denmark as its export market has shrunk which is partly due to weaker trading partner’s currencies. There are also some problems within the banking system but overall it remains stable and is considered to have sufficient capital to meet the needs of the economy and interest rates are expected to remain steady as inflation is under control. The economy grew by 1.9% in 2010 and is expected to grow by 2% this year. The country has one of the lowest unemployment rates in the EU.
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