Housing prices continued to dive in Q4/2100, although slightly less than Q3, as homeowners lost a collective DKK66m ($12bn) in equity over the three-month period.
In response to new figures from mortgage lender Nykredit showing that collective home equity fell by DKK263bnb ($46bn) in 2011, a drop of 22 per cent, the worst since the pre-crisis years and the biggest drop since 1981, economists have warned that if housing prices continue to fall it could weaken the Danish economy even more and strengthen the crisis.
Nykredit senior economist Jens Lieutenant Pedersen said the downward spiral is being fuelled by a panic effect, reflected in all consumer confidence indexes at the end of last year.
"Even though home equity is more tied up than ready cash, shares or bonds, the continuing downward trend has a negative effect on household budgets. When homeowners see the value of their property dropping it seriously effects private spending, which has been hard-hit over the past few years, and threatens the prospect of an upturn."