Dutch home prices increased in last quarter of 2023; Up 5.3% annually

The prices for owner-occupied homes increased again in the last three months of the year compared to the same period a year earlier, reports the real estate agents’ association NVM. It was the first annual increase since the third quarter of 2022. That was followed by a period in which interest rate increases put pressure on house prices, but tight supply is now causing price increases again.

In the fourth quarter of 2023, an average existing home sold for 434,000 euros, 5.3 percent more than in the final quarter of 2022. Compared to the previous three months, home prices rose by an average of 3.1 percent. All housing types increased in price, with the strongest increases in terraced houses, apartments, and semi-detached houses.

Realtors were also busier than a year earlier. Compared to the fourth quarter of 2022, they sold almost 12 percent more existing owner-occupied homes.

According to the NVM, the tight supply plays an important role in the price increases. At the end of the fourth quarter, over a quarter fewer existing homes were for sale than at the end of 2022. In addition, real estate agents believe that more and more Dutch people have enough financial space to buy a house. Wages rose for many people, and mortgage interest rates are steadily falling again.

Due to these developments, overbidding is becoming increasingly the norm. In more than half of home sales, buyers paid more than the asking price. On average, the sales price was 1.3 percent higher than the asking price.

“Buyers and sellers show confidence in the market. Falling mortgage interest rates and rising incomes certainly contribute to this. As a result, we see the available supply of homes shrinking again. That fuels competition between buyers,” said Lana Gerssen, chairman of the NVM’s housing department.

More new construction would make the market for existing owner-occupied homes less tight, the NVM said. The market for newly-built homes recovered somewhat after major problems in previous quarters when construction projects came to a standstill or got scrapped. The number of newly-built homes sold increased by 57 percent compared to the year before to 6,100. But compared to a few years ago, that number is much lower. The average price of a newly built home fell again, this time by 2.3 percent.

“A diverse and, therefore, appropriate range of new construction will initiate the necessary flow and sustainability,” said Gerssen.