Netherlands home prices to increase 12.5% this year: ABN Amro
Home prices in the Netherlands will increase even more than expected this year and next. ABN Amro now expects home prices to rise 12.5 percent this year, instead of the previous forecast of 7.5 percent. And next year they'll climb another 5 percent, instead of 2.5 percent, the bank said in its latest housing market monitor, RTL Nieuws reports.
ABN Amro raised its forecast because the economic outlook in the Netherlands is much more favorable than last year. The economy was less affected by the second lockdown than the first, and the extensive government support measures helped limit damage. Unemployment predictions are also lower than they were a year ago.
Housing prices are also being pushed by the fact that very few homes are for sale - only 15,500 in the second quarter, Dutch realtors' association NVM reported last week. And they're changing hands very quickly. In the second quarter, homes were sold within 3.4 weeks on average compared to the 11 weeks average of the past 15 years.
The number of home sale transactions were high in the past months, with 102 thousand existing homes sold between January and May. That's some 10 thousand more than the previous record set in 2017. But ABN Amro expects the number of home sales to decline int he course of this year and 2022. The housing supply is small and the possibilities to move therefore limited.
Last week, the NVM reported that existing home prices in the Netherlands increased nearly 20 percent in the second quarter, compared to the same quarter last year. The association also raised concerns about the housing shortage and limited supply.
"The figures we present today once again exceed previous results,"NVM chairman Onno Hoes said. "The supply is still drying up and buyers are doing everything they can to get hold of a home. The housing market is completely crazy and as long as the political agenda does not match reality, the market will remain as tight as it is now."