Dutch housing prices up 11.6% in third quarter despite Covid crisis

So far it looks like the coronavirus crisis completely ignored the Dutch owner-occupied housing market. In the third quarter a record number of homes were sold at prices nearly 12 percent higher than the same quarter last year, the Dutch association for realtors NVM reported on Thursday.

A total of 41,500 homes were sold at an average price of 354 thousand euros, 11.6 percent more than the third quarter of 2019. This is the highest price increase in over 20 years, according to the NVM. Asking price on average was 2 percent lower than the purchase price.

According to the association, the housing market in the Netherlands is growing increasingly tight. Today, buyers can only choose between two available homes. Usually there are between 5 and 10 homes to choose from, NVM said. This is also the first time since 1999 that the housing market was this tight.

At 41,500 homes sold, there were 14.4 percent more housing transactions in the third quarter of this year than in the same three months last year. This was also the highest number of homes ever sold in this period, according to the NVM.

NVM chairman Onno Hoes is very concerned about the future of the Dutch housing market. "The consumer hardly has anything to choose from anymore, and with that we see that the price development continues to rise. The housing market really needs an expansion of the offer to keep housing affordable for a large group."

The government really needs to focus on creating more homes, otherwise the average Dutch household will not be able to afford a home anymore, Hoes said. "We understand that corona and its consequences have the highest priority within the cabinet, but the housing market should come immediately after that."

While owner-occupied home prices are still rising, the coronavirus did have a dampening effect on free sector rents, which decreased by an average of 0.4 percent in the third quarter - the first decrease in six years.