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. |