Dutch home prices jumped 11.5% in October; New record

The prices of existing owner-occupied homes in the Netherlands rose sharply again last month. According to Statistics Netherlands (CBS) and the Land Registry, buyers had to pay an average of 467,355 euros for an existing home in October. That is 11.5 percent higher than a year ago and a new record. In recent months, home prices have been rising at the fastest pace in over two years.

Compared to September, homes became 0.9 percent more expensive in October. The prices of existing owner-occupied homes peaked in July 2022. Prices then fell for a while. However, since June 2023, prices of owner-occupied homes have been rising again. In October, prices were on average 7.4 percent higher than at the previous peak in July 2022.

CBS chief economist Peter Hein van Mulligen said last month that the housing market is continuing to overheat. According to him, this is because buyers can pay more and there are still too few homes for sale. According to mortgage advisor De Hypotheker, buyers also have a greater borrowing capacity due to higher salaries and a slight decrease in mortgage interest rates. The average mortgage amount for the purchase of a new home rose to the highest level ever in the third quarter.

The fact that the demand for homes remains high is also evident from the number of transactions. In October, 18,131 homes changed hands, over 15 percent more than a year earlier. In the first ten months of this year, 164,661 homes were sold, an increase of almost 12 percent.

At the end of last month, CBS pointed out the great importance of housing construction for getting the housing market flowing. According to the statistics agency, a new home can lead to two or three other homes coming onto the market.

The government aims to structurally build 100,000 homes per year in the coming period. ABN Amro economists said in October that some 90,000 homes have started construction so far, but won’t be completed for another one or two years. According to them, the government’s target, therefore, remains out of sight for the time being.