Rabobank expects rise in housing prices to continue for the next two years

The housing prices will continue to rise this year and next year, the economic agency of Rabobank has predicted. The number of home purchases will also continue to rise because the trend of residential investors putting former rental homes for sale will continue.

The expectation is for homes to become 8.6 percent more expensive this year on average and another 5.7 percent in 2026. “Rising wages, growth in the number of homes, a low unemployment rate, and lagging home construction is ensuring that the demand is still far above the supply,” the quarterly report about the housing market stated. The housing prices grew by an average of 8.7 percent last year.

Many residential investors are putting their rental homes for sale due to unfavorable tax laws and stricter regulation on housing prices set by the former housing minister Hugo de Jonge. These factors have led to renting out homes becoming less profitable. The supply of rental homes has become smaller due to this.

Rabobank expects housing prices in Flevoland, Noord-Limburg, Midden-Limburg, and Groningen to rise the sharpest, with an average increase of 11 percent. “We expect the lowest price increase to come in the northern part of Noord-Holland, Alkmaar region, and Groot-Rijnmond. We are expecting price increases of seven percent in these regions,” said the bank.