Dutch home prices still climbing, but slowing down
House prices in the Netherland rose sharply again in April. But the pace at which home prices are increasing is lower than at the beginning of this year, according to new figures from Statistics Netherlands (CBS).
On average, an existing owner-occupied home was 19.7 percent more expensive than in April last year. The price increase was slightly higher than March's +19.5 percent. But it was lower than in January when prices climbed 21 percent, the highest increase in decades. House prices have been rising for some time now, while fewer homes have been sold. Last month, CBS counted approximately 16,000 transactions, almost 16 percent less than a year ago.
The substantial price increases are partly because the housing supply has shrunk considerably. As a result, home seekers are forced to bid well above the asking price to get a home. According to experts, the madness in the housing market is primarily due to the low mortgage interest rates. That makes it easy for people to borrow a lot of money to buy a house.
Mortgage interest rates started rising again recently, however. "The lowest mortgage interest rates have risen about three times since the beginning of the year," said financial expert Amanda Bulthuis of comparison site Geld.nl. "And we are still seeing those capital market rates continue to rise, so I expect mortgage rates to keep going up for a while as well."
This development seems to cautiously be sparking change. Figures from the Dutch Association of Real Estate Agents (NVM) showed last month that houses had become slightly cheaper in the first quarter of this year than the previous quarter for the first time in ages. The brokers expect that the supply of houses for sale will rise again this year.
Reporting by ANP