The number of houses sold in 2016 is expected to rise far beyond the bank’s earlier forecast. ABN AMRO’s Group Economics now foresees a 15 per cent increase in residential property sales compared with 2015, while in March the economists put this figure at 10 per cent. According to Group Economics, a further 5 per cent rise can be expected in 2017.
Philip Bokeloh, economist at ABN AMRO: “Continuously declining mortgage interest rates have made homes more affordable and even people who never considered entering the housing market are buying homes. As residential property prices continue to rise and fewer homeowners are burdened by residual debt, the housing market is gaining momentum. What’s more, dual-income families are benefiting from the easing of income standards set by the National Institute for Family Finance Information (Nibud), which is enabling many of them to get higher mortgage loans.”
More houses sold than in record year
All of Group Economics’ previous expectations for the housing market are being surpassed. During the first five months of 2016, over 75,000 residential properties were sold – 25 per cent more than in the same period last year. If sales continue to rise at the same rate in the rest of the year, the total will come to 223,000, meaning 13,000 more houses will have been sold than in the record year of 2006. However, Group Economics does not expect the number to rise that high, assuming instead an annual total of 205,000.
Although the number of transactions has been growing sharply so far, Group Economics maintains its earlier predictions that residential property prices will rise by 4 per cent in 2016. The economists have not adjusted their forecasts for 2017: the number of houses sold will rise by 5 per cent and prices by 3 per cent. The main reason for this is the outcome of the Brexit referendum. Philip Bokeloh: “The outcome is causing uncertainty, which is likely to slow down economic growth and have negative implications for the labour market. Less job security means people are less willing to enter into major financial obligations such as buying a house,” said Mr Bokeloh.