Negative interest adds pressure to property market

A consequence of the upcoming introduction of negative deposit interest rates for private bank clients appears to be that many are withdrawing their deposits and investing in real estate instead.

Both of the country’s leading banks, BankNordik and Betri, have announced that they will be introducing negative deposit interest for private clients, on 1 March and 1 April, respectively.

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“We have noticed an increased interest among private bank clients with high deposits for buying rental properties since the negative interest rates were announced,” says Jákup Andrias Hansen, property agent at real estate firm Betri Heim.

Great and sudden investment in rental properties usually results in a price hike, and Hansen confirms that this also appears to be the case now.

Translated by prosa.fo