ABN AMRO’s Group Economics department expects the number of house sales to approach the record high of 2006 next year. The bank’s economists are predicting a 10% rise in the number of sales in 2016 and a 5% rise in 2017. At the end of 2015, the economists expected increases of 5% and 2.5% respectively.
Philip Bokeloh, Economist at ABN AMRO: ‘Almost 210,000 homes exchanged hands in 2006. We expect to approach this number in 2017. The current low interest rates mean it is now a good time to purchase a home, and many people who had put off buying a home in recent years are now buying. The fact that house prices have been on the rise for some time is inspiring confidence among consumers. Plus which, the recovery of prices means fewer homeowners are facing negative equity and they can move house more easily. All of these factors are good for the housing market.’
House prices rising more steeply too
The bank’s economists expect a 4% rise in house prices in 2016, as opposed to their previous forecast of 3%, and a 3% rise in 2017. At the end of 2015, their forecast for 2017 was only 2%. Mr Bokeloh: ‘The low interest rates are making it more attractive for consumers to buy their own homes – and that translates into higher house prices. To an extent, however, the rise in prices is being kept in check by the government’s stricter mortgage standards. Buyers can borrow less money based on their income and the value of the collateral.’