Dutch housing market overheated; home prices up 9.7 percent

Housing prices in the Netherlands were on average 9.7 percent higher in the third quarter than a year ago, realtors association NVM announced. "The housing market is overheated in many places, especially in the cities", NVM chairman Ger Jaarsma said to broadcaster NOS.

In cities with a high demand for homes, housing prices increased much more than the national average. Leiden saw the biggest increase at 18.8 percent, followed by The Hague with 18 percent, Almere with 17.5 percent and Amsterdam with 17.1 percent. Housing sales in the cities decreased by around 15 percent due to the fact that the market has little to offer.

In total, NVM realtors sold 40,973 homes in the third quarter, only a little higher than the 40,895 homes that were sold in the same quarter last year. One in four homes were sold above asking price, compared to one in seven a year ago.

According to the NVM, homes in the major cities in the Randstad are becoming increasingly unavailable to people with a limited budget. The average asking price for a home in Amsterdam is now 506 thousand euros. The number of homes sold for 200 thousand euros or less, decreased by 67 percent over the past year. Utrecht, The Hague and Rotterdam also have fewer and fewer homes sold for 200 thousand euros or less.

Particularly people looking to buy their first home are falling victim to this trend, according to the association. People just starting on the housing market often have little savings, while they have to spend more and more of their own money due to stricter home loan standards. They're also increasingly facing competition from investors buying up cheap homes to rent out.