Home prices in Netherlands to rise 2.4% next year after this year's fall: Rabobank
Home prices in the Netherlands stabilized faster than expected, and Rabobank now expects them to start climbing again next year. The bank’s economists expect house prices in the country to fall 3.5 percent this year but increase again by 2.4 percent in 2024.
Dutch home prices fell relatively hard since July 2022, but in June and July 2023, they stabilized compared to the preceding months. “That was somewhat earlier than we expected,” Rabobank said. Compared to July 2022, at the peak of the market, home prices were still 5.4 percent lower in July 2023.
“The stabilization is probably the result of mortgage interest rates not rising much in recent months, while the nominal incomes of Netherlands residents increased more than we expected,” the bank said. As a result, potential buyers can borrow more for their mortgage.
The Netherlands also still faces a significant housing shortage. “In a tight market, more borrowing space means upward pressure on house prices,” Rabobank said.
In its previous estimate in June, Rabobank expected that home prices would fall 5.2 percent this year and only stabilize next year.
The bank also adjusted its sales forecast slightly upward. It now expects that about 180,000 existing owner-occupied homes will change ownership this year and 170,000 next year. The decline next year is partly due to an expected dip in new construction, Rabobank said.
Rabobank expects that interest rates will fall somewhat from this autumn, but it added that inflation remains a critical uncertain factor in its housing market expectations.