Rising wages to push home prices even higher; Up 8.7% this year and 3% next: ABN Amro

Home prices will rise more this year than previously expected, reported ABN Amro. Prices in the tight market will continue to climb due to rising wages, according to an economist at the bank. However, income growth next year will likely be lower, and so will the rise in home prices.

The bank now expects sales prices to rise by 8.7 percent this year. Previously, ABN Amro projected 8 percent. The expected increase in 2026 remains at 3 percent. Slower income growth could curb housing demand, according to the bank.

ABN Amro also predicts that the number of home sales will be significantly higher this year, but will rise less sharply next year. Up to and including August, 149,534 homes were sold this year, 16 percent more than in the first eight months of 2024. Many landlords have been selling former rental properties for some time because higher taxes and stricter rent laws make renting them out less profitable.

According to the bank, this trend appears to be declining. ABN Amro still expects a 12.5 percent increase in all home sales this year. Next year, that increase will drop significantly to 1 percent. The wave of sales among investors is expected to have largely stabilized by then.

Housing market economist Mike Langen observes that price differences between different regions are narrowing. He believes this could indicate that price increases are slowing. However, he warns that tension in the housing market remains. “At the same time, we see that the housing supply is lagging for the time being. The number of new homes is barely growing. As a result, the target of 100,000 homes per year is slipping even further away.”