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No last minute panic. Just panic.


Recent days have seen interest rent hikes on a scale that we had forgotten was even conceivable after an exceptionally long period of downtrending interest rates. Colliers believes that interest rates will see a renewed decline, just as the property market will bounce back once we see a sharp slowdown in the outbreak.

At Colliers, CEO Peter Winther keeps calm, although activity has already slowed in the property market.

“As long as Denmark remains shut down, the market will be severely affected by the consequences, which is only to be expected. Only few businesses dare make any decisions in terms of renting new premises, relocating, investing, etc. When topped by last week’s quite substantial hike in Danish interest rates, all this is bound to trigger a market response, that makes perfect sense”, says Peter Winther, who is nevertheless quite optimistic about the future.  

“The market will bounce back at some point; we just need to be patient. It may take another four weeks, it may also take months, but every epidemic passes eventually”.

Danish economy fit to weather the crisis

Judging by all indicators, the world economy enters into recession in the second quarter. However, the Danish government is not alone in launching several stimulus packages: All around the world, massive stimulus packages are underway. These measures will potentially boost economic growth, but not until the epidemic subsides. Most recently, Germany has proposed a very comprehensive stimulus package.

In Denmark, interest rates hiked also during the panic peak of the financial crisis. When everybody is looking for liquidity, you sell whatever you can without tremendous losses. This has hit Danish mortgage bonds, and we may not necessarily have seen the end of it yet.

However, provided global monetary policies continue to be lenient, we believe that interest rates will decrease again when the worst panic has died.

Danish economy has strong fundamentals that put us in a good position:

  • Low sovereign debt. With very low sovereign debt, 34% of GDP, Denmark has more funds than most other countries to kick-start the economy by means of expansionary fiscal policy. By comparison, German sovereign debt is 62% of GDP and the US equivalent is more than 100% of GDP
  • Global strongholds. Several key sectors of Danish industry are not overly susceptible to cyclical changes. We have global strongholds in the fields of e.g. food and pharmaceuticals – products that are in demand even in times of severe crisis

“At the moment, we maintain that the market will bounce back quite strongly. However, we do not believe that 2020 will turn out as we anticipated back at year-start. It is likely that activity will not get back to normal until well into 2021”, says Peter Winther.


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Peter Winther

Executive Director | Partner | MRICS


Peter is Executive Director and heads Colliers’ Danish Investment & Capital Markets teams. Peter provides strategic property consultancy services and facilitates the sale of commercial and investment properties, including hotels and shopping centres, as well as property portfolios and companies.

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