Dutch housing price increase continues to slow down; Prices up 14.5% since last July
The pace of the increase in Dutch housing prices is slowing down, according to figures from Statistics Netherlands (CBS). In July, the organization noticed that the price increase was considerably lower for the second month in a row, while again far fewer homes were sold. The market appears to be showing signs of cooling down, experts said earlier.
On average, buyers paid 14.5 percent more when purchasing a home in July compared to a year ago. In June, the increase was at 16.6 percent. The yearly price increase is still strong, but is not nearly as strong as at the beginning of this year. At that time, prices showed a rise of about 21 percent compared to 12 months earlier, the highest level in decades.
The fact that prices are rising less rapidly is probably related to the rise in mortgage interest rates. As a result, the maximum amount that many people can borrow has decreased. In addition, real estate organization NVM has already noted that the number of homes for sale in the Netherlands has increased significantly in recent months.
People generally prefer to sell their house first before buying a new home themselves, the NVM also said at the time. The latter may explain why the number of people moving is much lower than a year ago. The national Land Registry recorded 16,417 residential transactions last month, almost 14 percent less than a year earlier.
It is unclear what will happen to housing prices in the near future. Mortgage rates have now shown signs of falling again, noted mortgage advisory chain De Hypotheekshop. Economists at ING wrote earlier this month that it is more likely that housing prices will stabilize in the coming months instead of falling sharply.
The fact is that the housing supply in the Netherlands is still very limited, which continues to play a role in pricing. Many experts believe the housing market can only begin to trend downward if more homes are built and made available, which could take years. The nitrogen emissions problem is one of the reasons why the acceleration in the construction of new homes has not gotten underway.
Reporting by ANP