Dutch home prices to increase 8.5 pct. this year: ABN Amro

houe for sale/sold sign
.

ABN Amro expects that home prices in the Netherlands will increase by an average of 8.5 percent this year and 7 percent next year, instead of the bank's previous predictions of 8 and 5 percent respectively. According to the bank, interest rates will remain low for the time being, resulting in housing prices increasing faster than previously expected, ANP reports.

"We are faced with disappointing international economic data, renewed doubts about Italy and the increased threat of a trade war", Philip Bokeloh, economist at ABN Amro, explained. "For all these reasons we have adjusted our interest rate estimates downwards." The bank expects that interest rates will increase slowly over time. "The European Central Bank wants to restore monetary policy and we think the bank will take plenty fo time for this because of low inflation."

ABN Amro worries that the threatening trade wars will have a negative impact on the housing market. According to Bokeloh, this will result in consumers becoming more hesitant about making large purchases, like a home. 

Tags: