Home prices up 21% in a year; Average price over €1 million in Blaricum & Bloemendaal

Dutch house prices are rising faster and faster. The yearly price increase recorded in January was even higher than in December, according to Statistics Netherlands. That month had also seen the strongest year-on-year price increase in over 40 years.

The average existing owner-occupied home now costs almost 435,000 euros. That is 21 percent more than in January 2021, and the strongest increase since the stats office started keeping track of these figures in their current form in 1995.

Comparing with earlier years is more complicated. Then you have to rely on old data that was only registered per quarter. The last time there was a higher price increase in a quarter than last month was in 1970 when the government strongly encouraged buying a house.

CBS also looked at the prices per municipality. Data for that is available up to the end of last year. Two municipalities now have average home prices above 1 million euros - Blaricum and Bloemendaal. Laren is also getting close to the 1 million mark. Pekela in Groningen has the cheapest homes. There you pay about 200,000 euros per home on average - a lot more than the average sales price in the municipality in 2020.

CBS economist Peter Hein van Mulligen said that the recent substantial price increases are linked to low mortgage interest rates, making it easy for people to borrow a lot of money to buy a house. Mortgage interest rates are now rising again, but the effects are not yet visible in the figures, according to Van Mulligen.

According to the economist, the fact that people saved a lot during the coronavirus lockdowns also plays a role. Home seekers often have more money to put into a house. In addition, the supply of homes for sale has shrunk considerably. Many people, therefore, bid well above the asking price to get hold of a house.

Fewer and fewer people are moving, likely due to the limited housing supply. In January, CBS counted approximately 14,000 homes that changed hands, almost 43 percent less than a year ago. But this comparison gives a bit of a distorted picture. A tax benefit took effect on 1 January 2021 for first-time buyers up to age 35. As a result, many people postponed their buying ambitions from the end of 2020 to January 2021.