Today’s big topic: Homebuyers are suffering from runaway ’FOMO’
If many people assume that home prices will continue to rise, it risks becoming a self-fulfilling prophecy.
What’s happening?
’I’d better buy now – because if I wait, prices will rise so much that I’ll be shut out of the owner-occupied housing market’.
That rationale is spreading rapidly among Danes who are considering buying their first home.
Sixty-nine percent of them now cite fear of future price increases as one reason they’re thinking about buying. Three years ago, only 40 percent gave that reason.
The fear of being left behind is understandable, both economists said. In recent years, housing prices have surged in the country’s biggest cities. The price of owner-occupied apartments in Copenhagen has risen by more than 25 percent over the past year.
Why it matters!
But it’s unhealthy for price formation when many people consider buying because they assume prices will keep climbing. It is by no means a given that prices will just continue rising without end. They can fall again.
But if many – or even most – gradually come to assume that prices will just keep rising, it risks becoming a self-fulfilling prophecy. People will rush to buy and may be less inclined to negotiate on price. Fewer discounts will lead to further increases in prices.
»It can send the housing market into a runaway upswing, which over the longer term can lead to a bubble that bursts. We don’t necessarily have a bubble yet, but the components are there«, said Michael Harboe Møller, senior analyst of The Knowledge Centre for Housing Economics.
Still curious? Read the full article here.
In other news
– Moderaterne are setting their sights squarely on a ministry of economic influence in coalition talks.
The Moderates are aiming for a heavyweight economic ministry in order to wield the government machinery’s national economic number-crunching tools more effectively than they did in the SVM coalition. »We are a reform party, and I would love for this party to have had more access to analytical firepower than we have had in this government constellation«, says party leader Lars Løkke Rasmussen (M).
– Adopted children from South Korea are suing Denmark
Eight adoptees from South Korea are filing suit against the Danish state on Monday, accusing it of acting in violation of Danish law in force at the time, as well as human rights, in connection with adoptions from South Korea to Denmark, they said in a press release. They are each seeking 250,000 kroner in damages. The adoptees describe the case as a matter of principle, focused in particular on adoptees’ rights, origins, and family life, said Gitte Mose, one of the eight bringing the lawsuit: »This is about a sense of justice. About not having access to your origins. Because that has a profound effect on a person’s identity formation, and it lasts for the rest of their life«.
–New daytime train to Hamburg undercuts competitors on price
It is the Swedish rail company’s first daytime service from Stockholm via Copenhagen to Hamburg, and it will compete directly with DSB’s departures on the route; the Czech operator Ceské Dráhy, which continues on to Berlin and Prague; and both Snälltåget’s own night train and SJ’s equivalent. »If rail traffic is to support the green transition, it is necessary to offer travelers accessible and competitive rail routes to major European hubs«, says Martin Trandberg Jensen, lector at the Department of Culture and Communication at Aalborg University.
Talk of town: Borgernes Parti is suffering a total meltdown
Meeting in the parliamentary chamber. Independent Emilie Schytte with Borgernes Parti leader Lars Boje Mathiesen and Citizens’ Party’s Nadja Natalie Isaksen.
On Sunday evening, Nadja Natalie Isaksen announced that she is leaving Borgernes Parti (BP). »This is completely insane«, said Elisabet Svane, Politiken’s political analyst.
»It’s a total meltdown, but it’s also proof that you can’t just start a party and expect it to work. You may be able to collect the required signatures, but building a party with a coherent platform, consistency, and an organization takes time«, she said.
»Lars Boje has always been the party, and now he’s back where he was when everyone else walked out of the Nye Borgerlige (NB) back in the day«.
Elisabet Svane does not think there are any similar precedents.
This newsletter features stories originally published in Danish. AI was used to shorten and translate the articles into English, after which a member of the editorial staff reviewed and refined the content.