Dutch banks expect home sales prices to keep breaking records these months

Housing market experts think that home sales prices will continue to rise on the Dutch market in the coming months. Sharp wage increase were partially responsible for housing prices setting a new record, Statistics Netherlands and the Kadaster land registry said earlier on Monday.

In May, home buyers had to pay an average of 445,430 euros for an existing residence. Wages have been rising faster than the prices of goods for some time, allowing people to spend more on a home, said Matthijs Korevaar, associate professor in the field of the housing market at Erasmus University Rotterdam. When combined with the limited supply of homes on the market, prices were pushed higher. Mortgage interest rates have also stabilized after rising sharply in the recent period.

ING economist Sander Burgers also expects the increase to continue in the coming months, because wages are continuing to rise. He does think that the pace of increase will slow down somewhat. Rabobank economist Carola de Groot also expects a further increase in housing prices.

The lack of supply on the housing market may even worsen, Burgers warned. "This means that the supply and options will continue to reduce." De Groot noted that there are few homes currently for sale, and not many new housing units are bing completed.

It is difficult to quickly create more supply in the short term, according to Burgers. Making better use of the existing housing stock can provide relief in the short term, he said. For example, the government could encourage home sharing, and allowing homeowners to rent out spare rooms.

Mortgage advisor De Hypotheker also pointed to an apparent acceleration in rising home prices. "Based on mortgage applications and home values ​​in the current month of June, there appears to be an increase of more than 11 percent compared to June 2023. Housing prices have risen sharply, especially in recent weeks."

In some places, housing prices are rising more than elsewhere, the Erasmus professor said. The new Cabinet should focus on building new homes in areas where housing prices are the highest, because that is where new construction can have the greatest effect, Korevaar reasoned.