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The Development of Danish Valuers
VAT News Vol.3/2000 (July-September 2000)

Mr. Leif Knudsen
National President,
The Danish Association of Chartered Estate Agents

The Danish Association of Chartered Estate Agents is by far the largest Danish association of estate agents, covering approx 95% of all Danish estate agents. We have approx 2,100 members in approx 1,400 businesses. The vast majority of valuation work in Denmark is carried out by our members.

The current real estate market situation in Denmark
        The residential market is flattening out due to some rather severe restrictions taxwise imposed by Government in order to avoid an overheating of the Danish economy. House prices have increased dramatically over recent years and Government decided to try to control this a couple of years ago, which has been successful. Furthermore, on 28th September 2000 the Danish population will have to decide in a referendum whether or not Denmark should join the European Monetary system within the EU, the socalled EURO. All opinion poles show a split decision (50/50) which of course creates some uncertainty regarding interest rates in the future. The commercial market is OK, particularly in the Greater Copenhagen area, primarily due to the fact that a new bridge will open tomorrow between Copenhagen and another major Swedish city of Malm, creating a major metropolitan area of some 3.2 million inhabitants. A large number of major multinational companies have decided to move their Nordic or Northern European headquarters to Copenhagen because of this vast improvement of infrastructure.

Perception of the development of the real estate market
        The Danish real estate market were in a rather bad shape until 1993 due to a bad pan-European recession. But ever since 1993 the residential as well as the commercial market has been booming. As mentioned above we expect a somewhat slower development in the coming years on the residential side, depending to some degree on the outcome of the referendum in September, whereas we expect a further major development on the commercial side in the coming years.

System of professional indemnity insurance for valuers in Denmark
        The Danish Property Transaction Act covers all property transactions in which a consumer is involved. According to this Act a professional indemnity insurance is obligatory for all professionals involved and furthermore, in order to be registered as an estate agent you have to put up a guarantee of not less than 2.5 million DKK (US$1.2 million) against any claim from consumers. In other words, If an estate agent makes a wrong valution the consumer can claim his loss covered by the incurance company. All members of our association are covered by such an indemnity insurance and this will cover any loss suffered because of a wrong valuation, even if we are talking about a commercial property, where no consumers are involved.

The major successes in the development of the valuation in Denmark
        Our major success was the introduction of new education for valuers in the early ninities. This enables us to keep the vast majority of valuation jobs in Denmark within our organisation's members. We are planning to enhance the education to a university level in order to be even more competitive. A large number of foreign valuers (related to RICS in England and the major international accountants i.e. the "Big Four") are trying to penetrate our market, and consequently we will put a lot of emphasis on further education. As a founder member of TEGoVA, we will probably enter into the "Approved by TEGoVA-scheme", which was introduced earlier this year. So: A high education level combined with a quality certification scheme is probably the path to follow.

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