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Denmark real estate market could lose 10 percent of value if speculation banned

As some of Denmark’s pension funds prepare to write down their property portfolios, the country’s housing minister says he would find a 10 percent market decline an acceptable outcome as he tries to alter the law to prevent speculation.

“I can live with smaller losses since the market has doubled within the past five years,” Denmark's Housing minister Kaare Dybvad said in an interview on Friday. “Against that background, I can live with losses at 10 percent, for instance.” | Photo: Andreas Merrald

The comments follow a heated debate in Denmark, largely centered on Blackstone Group Inc. Kaare Dybvad, the minister for housing in the Social Democrat government, says the firm represents an “infamous” business model in which properties are bought, renovated and then put back on the market at rents that tenants can’t afford.

Blackstone says that it follows the law and that it represents too small a chunk of the Copenhagen real estate market to affect prices.

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