Netherlands' house prices dropped slightly in August

Dutch home prices fell very slightly in August, according to Statistics Netherlands (CBS). Homebuyers paid on average 0.1 percent less for an existing home than in July. CBS economist Peter Hein van Mulligen called it a trend break.

Compared to a year ago, owner-occupied homes were still significantly more expensive, but the price increase was much smaller than a few months ago. At the start of this year, the stats office reported the strongest increase in decades, with a plus of about 21 percent. Prices are now only 11.9 percent higher than the same month last year.

CBS’s price index is often slightly lower in a particular month than the previous month, but this is usually in December. The last time the stats office noticed a slight price drop in another month was in February 2019.

According to experts, there have been several signs recently that the housing market is finally cooling off after a period of significant price increases. “You can’t draw too many conclusions from one month,” Van Mulligen nuanced. But he also pointed out that the monthly increases in house prices in July and June were already minimal.

According to the economist, this is probably due to the increased mortgage rate resulting in many people being able to borrow less. Van Mulligen also said that consumer confidence had fallen quite hard recently. People generally don’t think it is a good time for major purchases - like buying a house - at the moment.

The latter may also explain why the number of relocations is lower than a year ago. The Land Registry registered 16,405 housing transactions last month. That is almost 5 percent less than a year earlier. People generally want to sell their house before buying a new one, the realtors’ agency NVB noted not so long ago.

It remains to be seen what the future of house prices will do. Rabobank economists recently said that house prices could fall to a limited extent in the course of next year. Though the bank still expected house prices to rise this year and next, viewed over an entire year. The housing market is also still tight. So sellers still quickly find a buyer, Rabobank said.