4% rise in home selling prices in 2024 due to high demand and low supply; ING

A combination of rising wages, high demand, and low supply should push the selling price of homes up by 4 percent in the coming year, ING reported on Friday. This would set the average sales price at 441,500 euros, according to ING’s projection and data from Statistics Netherlands (CBS). The bank believes this increase would bring home prices back to the peak level recorded in mid-2022.

ING remarked that home prices have already been increasing over the past few months. The bank attributes this to increased wages and the ongoing housing shortage. The bank also suggests that due to higher wages, the affordability of homes has improved, leading buyers to be willing to pay more than before. In addition to that, higher wages result in larger mortgages.

“At the same time, the market remains tight,” ING wrote. The bank observed that in recent quarters, there have been fewer homes put up for sale, and the number of newly built homes is also decreasing, keeping the supply relatively low. “All in all, the housing shortage is increasing even further,” the bank added.

The bank expects wages to continue rising and the housing shortage to persist. These factors will lead to further increases in home prices next year. In its base scenario, ING forecasts that prices will be more than 4 percent higher at the end of 2024 than they are now, reaching the peak of mid-2022. “This price increase during 2024 will approximately make up for the previous price drop,” the bank noted.

This week, Statistics Netherlands (CBS) reported that home prices rose by 0.7 percent in October to 424,521 euros. Based on ING’s projection, this would set the average sales price at 441,500 euros.