At least 150 000 Danish homeowners are technically insolvent, Danish media reports. For many of them it comes as a shock, as they’ve just been informed of their critical situation.
“The housing prices have fallen twice as strong in this crisis compared to the past. Almost one in every third of the youngest homeowners are technically insolvent. My expectation is that it will be more.”
The reason for the eye-popping Danish news is to be found in the country’s very special property assessments. Properties in Denmark are only valued every second year. Since the last assessment, the home prices have fallen almost 50 percent.
“The latest property assessments will be shocking reading for many Danish families,” the Danish newspaper EPN writes.
At least 150.000 Danish families are technically insolvent and will lose money if they must sell their home.
According to the newspaper most of the will just now discover this, when the latest official value of their residences are being released.
Home prices in Denmark have not fallen this much between two reviews, ever.
Many will find that the value of their property has been cut in half over the last two years.
Housing values are being reviewed every two years.
The reviews was undertaken by the Danish IRS in October, but the individual home owners are not enlightened to know the value that is determined before tax settlement is sent out in March the next year.
“Housing prices have fallen twice as strong in this crisis compared to the past. Almost one in every third of the youngest homeowners were technically insolvent. My expectation is that it will be more now. Not necessarily among the youngest, but among older homeowners. Some are in for a nasty surprise, ” associate professor, Jens Lunde, at Copenhagen Business School says.