Prices for housing will soar to record levels, says ING Bank

ING predicts that the average price for a home in the Netherlands will rise in the coming months to higher than the record set in July 2022. The provinces of Groningen, Limburg, Drenthe, Flevoland, Overijssel, Zeeland, and Noord-Brabant already have an average price higher than the record.

The bank reached this conclusion after analyzing the numbers provided by Statistics Netherlands (CBS) for the last quarter, and considering the seasonal effects on the housing market during the summer. "Buyers are more active in spring, which shows in the summer with higher price increases," said ING economist Sander Burgers.

Housing prices outside the Randstad are rising faster than in the Randstad because the homes in the Randstad already became more expensive, said ING. More people from the Randstad moved to a home outside the area because the homes were more affordable there. Due to the popularity of homes in rural areas, they too have become more expensive.

ING also thinks that the substantial rise in mortgage interest rates is a reason for the price increases. First-time buyers can, therefore, borrow less money for a home, and they usually live in the Randstad rather than outside the region.

Home seekers have also been increasingly searching for larger homes since the coronavirus pandemic. Those can usually be found outside Randstad, the bank added.

ING predicted in February that the prices of homes put on the market would increase by five to eight percent and would rise far above the peak by the end of the year.

The biggest reasons for that are the significant wage increases and the housing shortage. ABN Amro also expects the prices to rise towards record levels, the bank reported last month.