ABN AMRO: ‘Spectacular rise Dutch house prices in 2018’

Press release -

Prices in the Dutch housing market will be rising faster than expected in 2018. In its new publication the Housing Market Monitor, ABN AMRO’s Group Economics team reports that average prices of houses will likely end up 8% higher than in 2017. This means the bank’s economists have significantly adjusted their expectations upward, as only recently they were expecting to see a rise of 6%. The main reason for the adjustment is the strong rise in prices of homes sold in the first months of this year. In February, prices were up 9.5% on the same month last year. As a result of the ongoing increase, current house prices barely fall short of the pre-crisis level.

The number of houses being put up for sale is decreasing. The shortage in the housing market is making it more and more difficult to close transactions and has already led to a 6.2% decline in the number of sales in January and February. This had not been seen in many years, and Group Economics believes the number of transactions will continue to fall in 2018 and 2019. They expect a 5% decline, followed by a further decline of another 5% next year.

Less to choose from

Philip Bokeloh, economist at ABN AMRO: “The Dutch housing market is strained. Buyers have fewer houses to choose from as the number of homes up for sale continues to decline. In order to have any chance at buying a house, they have to raise their bids, which explains the sharp rise in prices we are currently seeing. As a result, the housing market is becoming less and less affordable, although conditions are still favourable from a historic perspective. We don’t expect a significant rise in mortgage interest rates in the near future, so prices are likely to keep increasing for a while. We assume they will climb by another 5% in 2019.”

Dutch house prices among steepest globally

The Netherlands are among the countries seeing the strongest increase in house prices. In the fourth quarter of 2017, Ireland was the only country where prices rose even more sharply. At the high-end of the Dutch housing market, we are currently seeing a spike in prices as well, as these home owners can now sell their houses without a potential residual debt. In fact, many of these people can use the surplus value they make on the sale of their house to buy the next, more expensive, home.

Check out the interview with Philip Bokeloh here (Dutch only).

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