Dutch housing prices to jump 9.1% this year, 10.6% next year, analysts say

Home prices in the Netherlands will increase by 9.1 percent this year and 10.7 percent next year, Rabobank said in a new forecast. The increase is double as high as its previous forecast, mainly due to the persistent housing shortage. Lower interest rates and higher wages also play a role, the bank said.

“Last quarter, we still assumed an average price increase of 6.7 percent this year, followed by 5.2 percent in 2025,” the bank wrote. But now the bank thinks the housing market is back to double-digit price increases. The first double-digit percentage increase was recorded in July when home prices jumped 10.6 percent compared to a year earlier.

“The rapid price recovery can be explained by the rapidly increasing demand,” said the Rabobank analysts. Wages increased, and mortgage interest rates dropped, giving potential buyers more borrowing capacity.

Against the increasing demand, the supply of homes is still very low. New construction was hit hard by the past two years’ high interest rates, resulting in the housing shortage rising. The number of homes for sale has been falling for more than a year. And due to the fierce competition for scarce homes, home buyers are massively overbidding again.

According to the analysts, the limited supply will continue to put pressure on the number of transactions. Rabobank expects 197,000 homes to change hands this year and 186,000 next year.

The bank expects that all regions in the Netherlands will have areas where home prices rise sharply, as well as areas where price increases lag behind the national average. “We are assuming a less clear picture than last year when prices in the northern ring of the Randstad and the ring around it fell the most.”

This year, the bank expects the largest price increase in Delfzijl (+16 percent) and Utrecht (+12 percent) and the lowest in Overig Zeeland and the Gooi and Vechstreek, both +6 percent.

For next year, the analysts expect the highest price increases in the northeast of the country and in Zuid-Limburg. “The price increase is expected to be the lowest in parts of the Randstad, but with an average price increase of around 10 percent, it is still not insignificant,” the analysts said. “The fact that the prices of existing owner-occupied homes are rising less rapidly in the most expensive regions does not alter the fact that the price differences in euros are increasing further.”

People who already reside in the northern Randstad cities could wind up leaving their hometown if they choose to buy a home because the demand in the region is so high. As the prices soar in Amsterdam, Haarlem, Utrecht, and Zaanstad, more of the current residents will leave for areas where they can pay less per square meter.

“We anticipate that increasing regional housing price differences will slowly but surely stimulate migration from their own city,” the analysts predicted. This is somewhat shown in the fact that sales volume has soared in the “relatively expensive” greater Amsterdam and Haarlem areas but also in “cheaper regions such as South Limburg and Zeeuws-Vlaanderen.”