At first glance Aarhus looks little different to many other European cities: designer outlets are dotted along the main shopping street, tourists peer at city maps and pillars are plastered with advertising. Yet there is something unusual about Denmark’s second city: from the ARoS art museum, in the centre, it is a 10-minute bike ride to the beach, where the grinding noise of traffic is replaced by the calls of gulls.
With its mix of urban energy and relaxed atmosphere, it is hard to believe that Aarhus has been overshadowed so comprehensively by Copenhagen, the Danish capital. But with a rapidly expanding marina, a developing public transport system and rising property prices, Aarhus looks set for a revival.
In June last year, six years after the financial crisis hit Denmark’s housing market, the Association of Danish Mortgage Banks reported that house prices had climbed to their highest level in two years.
“The price declines of recent years are finally being replaced by stable to slightly increasing prices for the country in general,” says Joachim Borg Kristensen, housing analyst at Nykredit, a Danish financial group. “The optimism among Danes – and Danish homeowners – has returned. In the past year, we saw a recovery in the housing market, where prices rose in Copenhagen and other large cities, including Aarhus … In 2014, we might very well see both a more broad-based recovery, and continued progress in Copenhagen and Aarhus.”
The Association of Danish Mortgage Banks also reports that the number of properties for sale has increased, while the length of time that properties are on the market has decreased.
Yet the picture did not always look so rosy: house prices fell by more than 19 per cent between 2007 and 2009. According to a recent report by the OECD, Denmark’s households remain among the most debt-ridden in the developed world.
The impact continued to be felt in 2012 when the average house price in Denmark fell almost 7 per cent to DKK 1.73m (£192,350) in the second quarter compared with the same quarter in 2011, according to the Association of Danish Mortgage Banks.
In 2013, however, analysts reported signs of renewed optimism among buyers in Aarhus, attracted to the city’s convenient location.
“The combination of a vibrant nightlife, thanks to its many students, the proximity to the harbour and the sense of community are unique,” says Ivo Luecker, a resident of the city. “It manages to strike just the right balance between a provincial town and a metropolis.”
In recent years, Aarhus has earned a reputation for being “the world’s smallest big city,” drawing in half a million visitors from around the world each year, according to the city council. Homes with beach views are the most popular, while seafront properties fetch the highest premiums.
In Risskov, an upmarket suburb north of the centre, a six-bedroom bungalow with 206 sq metres of living space, adjacent to Bellevue beach, is on sale through estate agency Danbolig for DKK 8m. It features a reception room with partially exposed brick walls and a large fireplace. The panoramic windows give direct access on to a terrace and adjoining garden, offering unlimited beach views.
It is worth noting, however, that non-Danes face strict regulations when buying real estate in the country. If they do not already own a property in Denmark, and if they cannot prove that they have lived in the country for at least five years, they will need permission from the Danish ministry of justice to buy. The regulations are even tighter if the property will be used as a holiday home rather than a main residence. The rules mean that foreign buyers are still scarce, with only a handful of Britons and Germans leading the way.
Those who do venture here may wish to consider the new Isbjerget (meaning Iceberg) development close to the harbour. Completed in 2013, only 14 of the 228 apartments have yet to be sold. One of these is a five-bedroom apartment on the seventh floor, which offers 213 sq metres of living space set across two levels. It features walk-in wardrobes, double-height ceilings and large windows offering plenty of natural light. The property is on sale for DKK 9.9m.
Uffe Vind, communications chief at Danbolig, is confident about the future value of properties in the city. “Both in Copenhagen and Aarhus there are quite a few attractive apartments built in old industrial harbour areas, and there will always be buyers for them,” he says. “There is no doubt that Aarhus and Copenhagen are the safe bets if you’re looking for a place to live with an underlying investment perspective.”
A more traditional option is a 19th-century townhouse in a street called Grønnegade, one of the oldest and arguably most remarkable streets in the city centre. The six-bedroom property has 128 sq metres of living space, and the patio in the backyard has been designed by a landscape architect. It is on the market for DKK 4.7m via estate agents Lokalt Liebhaveri.
With its attractive coastal location and moderate property prices, Aarhus is beginning to measure up to its bigger counterpart, Copenhagen.
● Aarhus is a 40-minute flight from Copenhagen
● Property in Denmark is taxed based on its land value, at present set at 7 per cent
● Aarhus is home to several multinational companies, such as Google
● The average house price per square metre is 20,750 Danish Krone (£2,320)
● The UN World Happiness Report lists Denmark at number one
● Temperatures in the summer can reach 22C, while sub-zero temperatures are common in winter
What you can buy for …
£500,000 A four-bedroom townhouse in Møllestien, one of the prettiest streets in the city centre
£1m A four-bedroom penthouse condo in the developing harbour, close to transport links
£2m An eight-bedroom mansion with sea views in Risskov, an upmarket suburb of Aarhus