Dutch home prices rose 8.6% in May to new record

Home prices rose by 8.6 percent last month compared to a year earlier and reached a new record, Statistics Netherlands (CBS) and the Land Registry report. In May 2024, buyers paid an average of 445,430 euros for an existing owner-occupied home. According to CBS, that is 1.8 percent more than the previous peak.

The previous peak was in July 2022, after which prices fell slightly due to higher mortgage interest rates. Since June 2023, home prices have been on the rise again in the tight housing market. The statistics agency stressed that the transaction figures do not take into account quality differences between owner-occupied homes, such as the size of the homes.

In May, home prices rose by an average of 8.6 percent compared to a year earlier. That is again a stronger increase than the month before. In April, homes became 7.5 percent more expensive on an annual basis, and in March, another 5.4 percent. Compared to April this year, home prices rose 1.1 percent in May.

For years, there have been many more people wanting to buy a home than homes for sale. Partly because of this, prices rose considerably until about two years ago, and potential buyers often had to outbid the asking price. Historically, low mortgage rates also allowed buyers to borrow more money for a home.

In addition to the housing shortage, home prices are rising again due to large recent wage increases and a lot of leftover savings from the coronavirus period. Unions say that higher wages are needed for many workers to pay the increased costs of groceries, for example. With a higher income, people can also offer more for a home.

Despite the tight supply and significantly higher prices, more homes changed hands last month. The number of transactions amounted to 17,591, which is 16.5 percent more than in May 2023, according to the Land Registry. In the first five months of this year, 77,721 homes were sold, almost 14 percent more than in the same months last year.

CBS chief economist Peter Hein van Mulligen and ING previously forecast that home prices would soon reach new records. The Dutch central bank DNB assumes annual increases of at least 4 percent until 2026.