Netherlands home prices up 20% as supply runs dry

Houses again became significantly more expensive in the last three months of last year. According to the Dutch Association of Real Estate Agents (NVM), home prices increased by more than a fifth compared to a year earlier. The madness in the housing market is accompanied by the smallest supply in at least 26 years, the trade association said in its quarterly report. This also increases the dichotomy between homeowners and home seekers.

On average, an existing owner-occupied home changed hands for 438,000 euros in the fourth quarter of 2021. That is an increase of 20.7 percent compared to the same period the year before. In the third quarter, home prices rose about 19 percent annually. Newly built homes have also become more expensive. Here the average selling price rose by 13.8 percent to 466,000 euros.

The NVM pointed to the decreasing supply of homes as the cause. The realtors' association reports that only 15,600 homes were for sale in the past quarter, a third less than a year earlier. That is the lowest number since the NVM started keeping figures on the housing supply in 1995.

Real estate agents sold 23 percent fewer homes in the final quarter than a year earlier. In the whole of 2021, they sold 19 percent fewer homes, which according to the NVM, is the most substantial decline since the credit crisis in 2008 and 2009.

According to Lana Gerssen, real estate agent and chair of the housing department of the NVM, the contractions between Netherlands residents with and without their own homes are in danger of increasing. "The pointing and blaming are already showing up. Seniors are told that they do not want to move. That is too easy. There is simply no suitable offer for this target group."

NVM chairman Onno Hoes is pleased that there is a Minister of Housing with the new Cabinet. At the same time, he advocates that Hugo de Jonge, who recently took up this position, regularly consult with parties from the field and civil society to solve the housing crisis.

There was also a tiny bright spot in the NVM report. The average amount for which a house was sold above the asking price did not increase. In recent years, overbidding increased steadily. The share of homes sold above the asking price also remained stable at 80 percent.