Dutch housing prices fall for the first time in three years

After years of steadily rising house prices, the housing market shows the first sign of cooling. Homebuyers, on average, paid 2.1 percent less for an existing house in the first three months of 2022 than in the previous quarter, realtors' association NVM reports. That's the first quarterly price decrease since the beginning of 2019. Compared to the first quarter of 2021, home prices were still much higher.

The average price for an existing home was 428,000 euros in the first quarter. Although that is less than at the end of last year, it is still almost 14 percent higher than the first three months of 2021. This year-on-year increase is less extreme than in the previous quarters, when house prices increased by about 20 percent compared to the same period a year earlier.

The housing market is still tight. According to the NVM, someone looking for a home generally chooses between fewer than two houses. Another sign of tightness is the frequent outbidding. Of all homes sold, 79 percent went for more than the asking price. That was 65 percent a year earlier.

At the end of March, just over 17,000 homes were for sale - a tenth more than at the end of December but 4 percent less than a year earlier. Realtors sold 29,000 homes in the first quarter, about 19 percent less than a year earlier.

According to NVM chairman Onno Hoes, "a light breeze seems to be blowing through the overheated housing market." But he still has plenty to be worried about. He believes that the supply of housing is still too small. The type of homes that go up for sale also doesn't match the home seekers' demands. Moreover, shortages of suitable labor and materials threaten to hinder the completion of new houses.

Newly-built houses were 11.5 percent more expensive in the first quarter than a year earlier. On average, they sold for 466,000 euros, according to the NVM.

The new Cabinet created a separate Ministerial post for public housing when it took office in January. Responsible Minister Hugo de Jonge wants to create 100,000 new homes every year from 2024. Hoes believes it is essential that the Minister takes control in tackling the housing shortage, including determining with municipalities where additional housing can be built.