NL home prices to increase 5% this year: ABN Amro

The Dutch housing market will continue to perform well in 2021, with the average price of a home increasing around 5 percent this year, ABN Amro's Economic Bureau said on Tuesday, NU.nl reports.

The price increases of the past six months will have a spillover effect on home prices in the coming year, the economists expect. The pandemic also hasn't had a major negative effect on consumer confidence so far, and the arrival of Covid-19 vaccines is a reassuring prospect for many.

The bank expects that the housing market will only feel the weakened economy once higher unemployment starts to realize. This will happen when the government's coronavirus support measures run out. The low mortgage interest rate will also eventually lose momentum, the bank expects.

"Central banks continue to stimulate, but there is little room for a sharp fall in mortgage rates and a further improvement in the affordability of owner-occupied homes," housing market economist Philip Bokeloh said. This will first result in fewer homes being sold and bought, and only then in lower price increases.