Business
Housing market falters as banking crisis continues
Sebastian Haw
March 17th, 2023
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Tremors are being felt throughout the global banking sector (photo: mcgillbusinessreview.com)
High inflation and rising interest rates over the past few months have put a spanner in the works of the housing market. In fact, last month was the worst February since 2014 for house sales.
Economists, however, are hopeful: some believe the market is beginning to thaw and that sales are returning to the levels seen before the pandemic.
In addition, many Danes are experiencing increases in wages to counter inflation rates.
But let’s not get ahead of ourselves: Nationalbanken still predicts the housing market will fall by 9.4 percent over the coming year.
Banks on the rocks
In other news, Danish share prices fell on Wednesday as Credit Suisse lost its biggest investor, the Saudi National Bank. As a result stocks in several Danish banks have fallen.
Following Silicon Valley Bank’s collapse a week ago, some are beginning to ask whether we are heading for another global economic crisis similar to 2008.
New York-based Signature Bank folded on Monday, and experts are concerned that First Republic Bank of San Francisco might soon go the same way. Banks around the world are starting to get nervous.
READ ALSO: Housing prices plummeted in October
Double bind
House owners still find themselves trapped between Scylla and Charybdis, with a sinking housing market on one side and unstable global banks threatening to collapse on the other.
In general, experts believe that both situations will improve, and that we are most likely not headed towards disaster.
Global banks, however, remain precariously tied to each other’s fortunes, meaning that we here in Denmark remain forever at the mercy of macro-fluctuations in the worldwide economy.
“The reason why other banks – also in Denmark – are affected is because one problem in one bank spreads rapidly in the financial sector,” said Otto Friedrichsen, a partner and equity manager at Formuepleje.
“Trust is a key parameter in the financial system in relation to business and transactions between banks.”
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