Toxic cocktail: Two scenarios for the housing market

Coronakrisen have created a toxic economic cocktail, which will be of major importance for our housing market, jobs and securities in the danes ' pension savin

Toxic cocktail: Two scenarios for the housing market

Coronakrisen have created a toxic economic cocktail, which will be of major importance for our housing market, jobs and securities in the danes ' pension savin

Ann McDonald
Ann McDonald
20 mart 2020 Friday 02:00
16 Reads
Toxic cocktail: Two scenarios for the housing market

Coronakrisen have created a toxic economic cocktail, which will be of major importance for our housing market, jobs and securities in the danes ' pension savings.

The dramatic global developments have prompted investors to flee from both stocks and bonds at the same time - which is unusual and has got interest rates to rise the last time.

chief Economist Jeppe Juul Borre from Arbejdernes Landsbank has just made an analysis of the coronakrisens importance of housing prices.

Society - 19. mar. 2020 - pm. 12:46 14.700 has been available this week

- I sets out two scenarios. I expect the first scenario - but it would be naïve not to fear the latter. Coronakrisen will affect the economy negatively. Unemployment will rise, and Denmark will be hit, sounds ominous from the chief competition economist.

He stresses that The European central Bank on Wednesday evening launched a new massive purchase program of bonds for the additional 750 billion euros. This should help to strengthen the economy and pushing interest rates down. Until the end of 2020, the central bank will buy securities for a trillion euro (7.500.000.000.000 crowns).

For the Danish housing market looks Jeppe Juul Borre, therefore, two hovedscenarier.

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- Coronavirussens ravages come undeniably to affect the housing market. The question is how much. My hovedscenarie is that coronakrisen will affect the housing market in a relatively limited period of time.

- We are entering a time where there will be fewer showings and, in general, less interest to buy housing. It will mean fewer trades. But we just stepped out of 2019, which featured the largest number of home sales since 2005, he says, and stresses:

- So the decline comes on the back of a housing market in high speed. It makes me feel a little more confident that corona does not affect a fragile housing market. But a strong housing market.

But when coronaepidemien fades out - and there again comes the time in the economy and society, so expect the chief competition economist, to the danes ' willingness to buy, take to again.

- However, not on quite the same level. It here will provide a significant blow to the Danish economy, he says.

- Rising interest rates and unemployment affect the housing market fairly quickly?

- Yes. But the interest is not the primary factor in it here. A week ago I would also say that coronakrisen will affect the housing market negatively, even if the interest rates at the time declined.

- So there I will say the same about rising interest rates. They may well push a little further on the road, but is not the driving factor, he says, and embarks on the more negative scenario for the housing market.

- The alternative scenario is that coronakrisen put themselves and propagate deeper in the Danish economy. Where we are going to see the unemployment rate rise. Not just in a fairly temporary time period - but long-term.

- If it happens, then we get a hard blow to the housing market. It, that keeps the housing market up there, and did it in 2019 - is a solid backdrop of low unemployment, record high levels of employment, and that the danes have had nice reallønsfremgang.

- If the coronavirus, go and destroy it here solid backdrop - among other things, that the record high employment will fall in a prolonged period of time - so we are talking about a more negative story. It is not my hovedscenarie. I expect the first scenario, but it would be naïve not to fear the latter, says Jeppe Juul Borre.

the Danish policy - 18. mar. 2020 - pm. 21:59 Coronageneralen was too vague: - I regret,

Updated: 20.03.2020 02:00
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