Dutch housing prices up 20.4%; Strongest increase in 40 years
In December, housing prices in the Netherlands saw the most significant increase in over 40 years. Prices jumped by more than a fifth - at least the strongest rise since Statistics Netherlands (CBS) started keeping track of these figures in 1995. It's harder to compare with older data, but according to CBS economist Pieter Hein van Mullingen, the last time homes became this much more expensive was in the late 1970s.
Existing owner-occupied homes sold for an average of 400,000 euros last month. That is 20.4 percent more than a year earlier and a record based on the current series of figures. For a comparison that goes further than 1995, you have to rely on old data that was only registered by quarter. The last time prices increased by more than 20.4 percent in a quarter was in 1977.
House prices rose sharply in the 1970s because the government tried to stimulate homeownership. According to experts, the current madness in the housing market also has to do with easy financing. Mortgage interest rates have been very low for a long time. In addition, homebuyers still benefit from tax benefits like the mortgage interest deduction.
The fact that the supply of homes on sale has shrunk considerably also plays a significant role. As a result, house seekers are bidding against each other, and it is increasingly difficult to find another house. This is also apparent from the figures on the number of relocations, according to Statistics Netherlands. In December, only 20,559 homes changed hands - almost 22 percent less than in the same month of 2020.
Van Mulligen thinks that house prices may soon rise even faster. Realtors' association NVM recently released new quarterly figures, which showed a price increase of 20.7 percent. These figures are based on the moment the purchase contract of a house is signed. Statistics Netherlands only processes the transactions after notaries register them with the Land Registry. That always happens a little later. Van Mulligen also pointed out that NVM brokers control a large part, but not the entire housing market.
Reporting by ANP.