Uncertainty fuels interest in rental housing: Times of crisis mean more people searching
Published lørdag den 04. april, 2020
Rising interest rates and fears for the future have led to more people looking for rented accommodation. An online rental housing portal says that the coronavirus crisis has brought increased activity – from both tenants and landlords.
The spread of the coronavirus and the shutting down of large parts of the Danish economy have led many to think twice before throwing themselves into the property market as a buyer. This is clear from the market for rental housing. According to housing portal Boligportal.dk, the crisis has led not only to more rental properties coming onto the market but to also greater interest from prospective tenants.
In the week to 29 March, the number of properties advertised was up 40% on the same period last year, and traffic was up 11%. “People spent the period from 11 March to around 15 or 16 March acclimatising to the new reality and getting family life and work to function,” says Anders Hyldborg, CEO of Boligportal.dk. “Since then, though, we’ve seen a very different picture, with demand recovering to last year’s levels and now growing rapidly.”
“People will probably be more cautious about buying and renting privately is an alternative. Times of crisis mean more people searching” – Jannick Nytoft, Danish Property Federation
“There has been a healthy supply of properties from both professional and private landlords,” says Hyldborg. “We’re seeing double-digit growth in supply on our portal relative to the same period last year.” He explains this growth in supply by it currently being very difficult to rent out properties for short periods on portals like Airbnb, and so landlords are instead looking for long-term lets.
Demand for private rental housing was already strong but has now shifted up another gear, as it often does in times of crisis. “Renting is more attractive in times of crisis than it was before,” says Hyldborg. “You’re not having to make the same commitment as when you buy somewhere.”
Since the spread of the coronavirus turned life upside down, Boligportal.dk has introduced virtual viewings so that people can see properties without physically going there. Hyldborg says that demand for virtual viewings has been strong. The Danish Property Federation, which represents the country’s property owners, landlords and managers, is in full agreement that the crisis has fuelled greater interest in rental housing.
“These are uncertain times, which is never good for a market, but people need a place to live. People will probably be more cautious about buying and renting privately is an alternative. Times of crisis mean more people searching for private rentals,” says Jannick Nytoft, CEO of the Danish Property Federation, who expects housing prices to slow in the coming months, and people to look to rent.
Lise Nytoft Bergmann, chief analyst and housing economist at Nordea Kredit, agrees that supply and demand in the rental market are currently on the up:
“Closed borders have dealt tourism a tough blow, including Danes who rent out their homes or parts of their homes on a short-term basis to tourists, for example through Airbnb. They lost much of their earnings in March, and April isn’t looking too good either. So, it’s natural for them to look for other sources of income.”
She is heartened by the prospect of more properties coming onto the rental market: “Many young people today choose to buy a flat themselves or through their parents to get a roof over their heads – not because home ownership is necessarily their preferred option, but because it’s very difficult to find a room or a flat with a reasonable rent. The current situation might help alleviate this.”
The article above was first published in business daily Dagbladet Børsen. Read the original article in Danish here.