Dutch housing prices will fall 10 percent over two years, says ABN Amro
Home prices in the Netherlands will fall 10 percent in the coming two years, 6 percent in 2023, and 4 percent in 2024, ABN Amro expects. Inflation and higher mortgage interest rates mean a gloomier outlook for the Dutch housing market.
“House prices are falling. This is because mortgage interest rates have risen sharply while disposable income is under pressure from inflation,” ABN Amro economist Philip Bokeloh said. The higher mortgage interest rates mean people can borrow less on their mortgage, while the higher living costs also mean they have less to spend.
ABN Amro thinks the mortgage interest rate may drop slightly in the coming period, but it will remain much higher than before Russia invaded Ukraine. In addition, wages won’t increase enough to compensate for inflation. “That means house prices will have to decrease further to improve affordability,” the bank said.
This year, the price drop will likely result in fewer homes sold. ABN Amro expects a 5 percent decrease in sales this year. But once the prices are lower, interest will likely increase again, and home sales will climb by 2.5 percent next year, according to the bank.
Despite the lower number of sales, ABN Amro expects more people to list their homes this year. “Sellers are putting their homes up for sale earlier than before. Fewer viewers come by, and the bids less often exceed the asking price,” the bank said. Sellers are less sure of getting an attractive offer and worry that the sale may take longer, so they list earlier.
According to ABN Amro, home buyers are also getting more critical about the state of the home. Things like a good energy label are increasingly important due to the high energy prices. Many buyers, therefore, would prefer a newly built home, but continuing problems in the construction sector often make that impossible.