Housing market cools further as mortgage rates rise and demand weakens

• House prices expected to rise by 3 percent in 2026 and 4 percent in 2027

• Transaction volumes set to fall in both 2026 (-3 percent) and 2027 (-4 percent)

• Housing supply shows little growth despite increase in building permits

High price levels and increase in mortgage rates dampening demand

The housing market is cooling further this year as mortgage rates rise and demand for housing declines. This has prompted ABN AMRO to maintain its forecasts, expecting house prices to increase moderately by 3 percent in 2026 and 4 percent in 2027. With many households having reached their maximum borrowing capacity, there is little room to stimulate demand. The bank expects wage growth to slow both this year and next. At the same time, economic uncertainty is making households less willing to draw on their savings. Lower demand and reduced sales of investment properties (sell-offs) are also bringing down transaction volumes. As a result, ABN AMRO expects the number of transactions to decline in both 2026 (-3 percent) and 2027 (-4 percent), according to the latest edition of the Housing Market Monitor, published today.

Rural regions catching up with Randstad

While the price forecast reflects a national average, there are significant differences at the regional level. Price increases are particularly strong in rural regions, while growth in urban areas is slowing. According to ABN AMRO, this is the result of a catch-up effect, with regions that lagged behind in price growth in recent years now seeing stronger growth and closing the gap. The metropolitan Randstad remains the most expensive region, but the difference with other regions is smaller than six years ago. This is reflected in the price-to-income ratio (PI ratio*), which ABN AMRO is the only party to measure quarterly at the provincial level and which shows that regional differences are narrowing. House prices in Zeeland, Friesland, Groningen, Drenthe and Limburg especially have risen much faster since 2020 than in the Randstad, where prices are relatively higher. In these calculations, the bank takes into account not only house prices but also incomes, as salary levels vary across regions.

Housing supply growth remains a concern

Housing supply growth will remain a bottleneck in the coming years, predicts Mike Langen, Senior Housing Market Economist at ABN AMRO. “In the first six months of this year, 27.6 percent more building permits were issued than in 2025, but this has not yet translated into more homes. The number of new homes added to the housing stock was 7.2 percent lower on an annual basis, so we do not expect housing supply to grow significantly this year. Faster planning procedures and a stable investment climate are crucial to this.”

* Every quarter, ABN AMRO estimates the price-to-income ratio (PI ratio) for each province, based on average regional transaction prices and median net household incomes between 2020 and 2026. It includes not only house prices but also incomes in these calculations, as salary levels may vary between regions.