The Dutch housing market continues to match and – according to the latest data – even outperform the optimistic expectations. Nevertheless, Group Economics at ABN AMRO does not see this as a reason to adjust its forecasts, according to the new Housing Market Monitor. The bank’s economists stand by their prediction of a 5 per cent increase in house prices and number of transactions for 2017.
The reason for these unchanged forecasts is that Group Economics expects mortgage interest rates to rise during the last six months of the year. Combined with these rising interest rates, the dwindling supply will force the sentiment on the housing market down. ‘The indicator of the Dutch Homeowners’ Association (Vereniging Eigen Huis) has already been declining slightly in recent months, although it remains high,’ comments economist Philip Bokeloh. ‘The high sales volume is causing the supply of homes to dwindle, and buyers’ choices are becoming limited. With homes selling faster and faster, they also have less time to decide. This is turning the housing market from a buyer’s market into a seller’s market.’
Average buyer age to reach 40
Statistics Netherlands recently calculated that over the past few years the average age of home buyers has climbed to 39. Group Economics believes that this upward trend will continue. ‘It won’t be long before the average home buyer will be in his or her forties,’ Bokeloh predicts. ‘It’s becoming more difficult for younger people to buy homes, now that income requirements are stricter and buyers have to pay part of the value from their savings, so first-time buyers are putting off the purchase. At the same time, more homes are being bought by older people, who now have more money than they used to. Many of them have an individual pension to supplement their state pension, and they’re less dependent on renting. They’re more likely now to buy a home that suits their wishes and offers the facilities that they need at their age.’
Preparing for an older population
Group Economics sees that older people prefer to remain in their homes as they become less mobile. Bokeloh continues, ‘Their homes aren’t always suitable, though. As the population ages, the demand for life-course-proof homes will increase. This means that new homes need to start making allowances for future care needs and that existing homes need to be adapted. The Blijverslening loan scheme that the Dutch Municipal Housing Incentive Fund (Stimuleringsfonds Volkshuisvesting) introduced last year already offers possibilities in this direction.’
Click here for the Housing Market Monitor.