Home prices up 1.8 percent in January

Homes for sale became more expensive again last month, Statistics Netherlands (CBS) and the Land Registry reported. In January, a home cost, on average, over 433,000 euros, which is 1.8 percent more than in January last year. Home prices also rose year-on-year in December.

Prices were 1.2 percent higher in January than in December. There are still many more home seekers than homes for sale. That scarcity means that homes have become increasingly expensive. Some home buyers also have more money to spend because wages have increased. In December, this caused homes to become more expensive on an annual basis for the first time in almost a year. Home prices have been rising month-on-month since the middle of last year.

Despite the higher prices, more people bought a home in January, the Land Registry reported. Over 14,000 homes changed hands last month, more than 10 percent more than last year's first month.

Home prices reached a record high in the summer of 2022, after which they fell slightly for almost a year. The increased mortgage interest rate meant buyers could borrow less money for a house. But that effect is now no longer reflected in the average house prices. The Hypotheekshop said on Monday that many lenders have increased mortgage interest rates again and that more interest rate increases are coming this week.

To solve the housing shortage, more homes need to be built. The big question is whether that will succeed. Last year, Dutch municipalities issued the lowest number of permits for new home construction since 2016, CBS reported a week ago. Permits were issued for almost 55,000 new homes, 15 percent less than in 2022.