Dutch home prices up 5.4% to average €493,875 in January

Home prices increased by an average of 5.4 percent in January compared to a year earlier, Statistics Netherlands (CBS) reported based on data from the Land Registry. The average sales price of an existing home last month was €493,875.

This marks the tenth consecutive month with lower price increases than the previous month. In December, prices rose by 5.8 percent year-on-year. Compared to December, prices rose by 1.2 percent in January.

Existing home prices peaked in July 2022. Prices then fell for several months, but the trend reversed in mid-2023. The average price of an existing home rose by more than 10 percent for several consecutive months last year. The average existing home price was 15 percent higher in January than during the previous peak in 2022.

Economists at ING, Rabobank, and ABN Amro previously predicted that home prices would continue to rise this year and next. This is a consequence of the tight supply in the housing market. Not enough new homes are being built to meet demand. In addition, household incomes are rising, giving buyers more to spend.

The fact that the rate at which home prices are rising is levelling off somewhat is due to landlords selling off their rental units. This has been happening on a large scale recently due to stricter regulations for rental properties. The rental sell-off increased the supply of owner-occupied homes. These properties are also often cheaper apartments, driving down the average home price.

The Dutch Association of Real Estate Agents (NVM) expects the sell-off of rentals to end by July 1 of this year. The NVM doesn’t expect the prices of owner-occupied homes to rise much more sharply after this.