Amsterdam housing prices cool off in first decline
For the first time in ages, the housing prices in Amsterdam declined slightly. In the third quarter, housing prices were 0.5 percent lower than in the second quarter. "Maybe we have reached the top of the market", Sven Heinen, the chairman of Amsterdam real estate association MVA, said to the Volkskrant. This may well be the first sign that the overheated Amsterdam housing market is starting to cool.
Compared to the third quarter of last year, home prices in Amsterdam still increased by an impressive 17 percent, Dutch realtors association NVM announced on Thursday. Chairman Ger Jaarsma described the housing market in the capital as overheated.
There are a number of signs of Amsterdam's housing market being overheated, including the fact that there are now only 1,244 homes for sale in the Dutch capital, according to the Volkskrant. In the second quarter, there were 1,747, which is also a low number. Especially compared to around 8 thousand homes on sale in the housing market crisis year of 2012. In the third quarter, the average price of a home in Amsterdam was a massive 506 thousand euros. There weren't even 200 homes on the market with a price below 200 thousand euros.
"The demand at the bottom of the market is gigantic", Sven Heinen of the MVA said to the newspaper. "We put a 45 square meter flat on sale for a price of 185 thousand euros. Eighty candidates showed up. The flat went for 215 thousand euros." Heinen hopes that the market is cooling down somewhat, but ads that everything indicates further price increases. "If we continue like this, we will reach a double digit growth rate by the end of the year. I do not see anything to the contrary. The demand is huge and the interest rates are low. We started the fourth quarter and that is always the strongest period when it comes to selling houses."
On Monday Klaas Knot, president of Dutch central bank DNB, warned about the situation on the Amsterdam housing market, which he too called overheated. Knot attributed the housing market madness in the Dutch capital to the recovering economy and low interest rates. He criticized realtors, accusing them of raising prices with a "not very transparent bidding process". According to Knot, realtors invite many candidates to view a home at the same time. This puts buyers under pressure of all this competition, pushing them to take risks by bidding above the asking price - and this often without reserving funding in advance or doing a proper constructional inspection of the property.