Dutch home sales prices will fall by 2.5 percent next year, says ING
Homes in the Netherlands will be sold by an average of 2.5 percent cheaper next year, according to economists at ING. This is mainly the result of higher interest rates, which means that buyers can not borrow as much to purchase a home. Experts at ABN Amro previously predicted an equally sharp fall in home prices in 2023.
Rising mortgage interest rates have a major impact on sales prices, because borrowing space largely determines how much buyers can offer for a property. In addition, next year it will become less attractive to buy a home as an investment. One reason for this is that the transfer tax for property investors will rise from 8 percent to over 10 percent.
In addition, the government is working on measures to introduce more regulations for mid-market rental units. This is expected to include limits on the maximum rent that a real estate investor can seek.
The number of homes which will successfully be sold will also decrease next year. The drop should equate to an 8 percent reduction, bringing total transactions down towards 175,000 transactions. This year, economists expect a 15 percent drop from 2021 levels to 195,000 transactions.
The tight labor market should mean that home prices will not fall at an accelerated rate, but if unemployment shows a surprisingly sharp rise it will likely depress demand for housing. ING’s economists said they do not believe unemployment will increase very much, despite the bank’s expectation that the Netherlands will enter a recession. There remains a structural shortage of housing. In addition, the government is allocating a significant amount of money to partially compensate consumers for high inflation and the sharp rise in energy bills.
ING emphasized that the estimate for next year is very uncertain. New developments surrounding the war in Ukraine, which already caused extreme price increases for gas, for example, can have a major impact on the housing market.
Reporting by ANP