Housing market "turnaround" clear with over 50,000 homes sold in Q1, up 10%: Analyst

More than 50,000 homes were sold in the Netherlands during the first quarter of the year, an increase of about 10 percent compared to the first three months of 2023. The figures suggest a possibility that the jammed housing market in the Netherlands could finally "loosen up" a bit, as the increase in transactions means more homes are also being put up for sale, said valuation and analyst office Calcasa.

“This really seems like a turnaround,” Calcasa director Tijs Pellemans told AD on Wednesday. “After the sharp [rate] increase over the past two years, mortgage interest rates have now been around the same level for a while. However, home buyers can afford the higher monthly costs because wages have also risen considerably.”

The increase in the number of homes sold has only been observed in the short term. If you look at the period from April last year to last March, the number of sales is still declining, but much less rapidly than in the two years before. Evidence of a trend could emerge within two weeks, when realtor association NVM releases its analysis of the real estate market in the second quarter.

Data from Statistics Netherlands and the Kadaster land registry showed that housing prices rose by 8.6 percent last year based on completed sales. Those prices are rising faster when also taking into consideration owner-occupied homes put on the market which have not yet sold.

Calcasa looked at those details and calculated a 5.5 percent price hike in the first quarter of this year compared to last year. Prices in the second quarter of 2024 were also up 8.8 percent on an annual basis, according to the company's first quarter report published this week. Second quarter prices were already 2.0 percent higher than the first quarter of the year.

Despite the increase, prices in The Hague actually fell by 6.0 percent during the first quarter, compared to Q1 2023. At the same time, Amsterdam housing prices jumped by 6.4 percent and Rotterdam home sales prices rose by 2.0 percent. The price of homes in the province of Utrecht shot up by 7.3 percent on an annual basis, more than any other province.

Quarterly home sales fell every quarter during 2021 and 2022, with many people opting to stay put during the coronavirus pandemic. Sales prices generally slipped, and when they started to rise again the price increase did not keep up with inflation. Real estate prices have been rising quickly with mortgage rates holding steady or even sliding down a bit.

Home prices up to 150,000 euros saw the sharpest price increase of 8.4 percent during the first quarter. Homes from 150 to 250,000 euros rose in price by 6.7 percent. There was a 7.1 percent increase for homes from 250 to 350,000 euros, and a 6.6 percent increase from there up to a half-million euros. Homes over 500,000 euros saw a 2.4 percent increase in the first quarter compared to a year ago.

When looking at assessed value, Calcasa said, "The value of all apartments is rising the fastest in the province of Utrecht with 9.0% on an annual basis. The smallest price increase was measured for houses in the provinces of Zeeland (3.5%) and Drenthe (4.2%)."

Foreclosures have also remained stable and relatively low since the start of 2022. A total of 223 foreclosures were reported to Kadaster during the last four quarters. There were 226 municipalities without a single foreclosure in the past 12 months, including Amersfoort. That was the largest municipality without a foreclosed property.

Nationally, the share of foreclosure sales versus total sales was 0.5 percent. "The highest share of foreclosure sales to total sales is 1.2 percent in the municipality of Brunssum," Calcasa stated.

The suspected turnaround is only evident from the most recent monthly data. When looking at the 12-month period from April 2023 through the end of march, sales of residential properties fell by 4.1 percent to 221,000.