Home prices increased over 20 percent in November

House prices in the Netherlands increased by more than a fifth last month compared to November last year. According to Statistics Netherlands (CBS) and the Land Registry, this is the strongest increase in more than two decades. It also equals the largest price increase in over 40 years.

In February 2000, owner-occupied homes were also 20.1 percent more expensive than a year previously. At that time, homes changed hands for an average of almost 160,000 euros. Last month, this amount had risen to over 400,000 euros, with newly built homes not included in the calculations.

Statistics Netherlands has been keeping track of this data on house prices since 1995. To make a comparison further back in time, you have to rely on old figures that were only registered per quarter. The last time there was a higher price increase in a quarter than the 20.1 percent of last month was in 1977.

Home prices rose sharply in the 1970s because the government tried to stimulate the purchase of a house, said CBS economist Peter Hein van Mulligen. In the years that followed, the economy deteriorated, and prices fell before rising significantly again in the 1990s. In the late 1990s, savings and investment mortgages were on the rise.

Now, house prices have again been rising for some time. One factor is that the supply of houses for sale has shrunk considerably, while many people still want to move. Mortgage interest rates are also very low. As a result, buyers are bidding against each other, and many people have great difficulty in buying a house.

The fact that there are fewer and fewer houses to choose from also affects the number of relocations. In November, over 16,000 transactions took place on the housing market. That is 13 percent less than n the same month last year.

Experts have been warning for some time that many more houses need to be built to tackle the housing shortage. De Nederlandsche Bank (DNB) has also repeatedly indicated that something must be done about the tax benefits for homeowners, which boost demand on the market. This concerns, for example, the mortgage interest deduction. According to the central bank, the prices are rising so fast precisely because people can pay a lot for a house.