Dutch home prices won't rise further this year: Rabobank

Economists at RaboResearch expect the price increase of existing owner-occupied homes in the tight Dutch housing market to level off to zero for the remainder of this year. This is partly due to deteriorating economic conditions caused by the war in the Middle East, compared with earlier forecasts, the researchers said.

Economic growth is turning out lower, and inflation is rising. According to housing market economist Carola de Groot of RaboResearch, this has consequences for the housing market. “Due to higher inflation and increasing inflation risks, capital market interest rates are expected to rise further. These, in turn, determine mortgage rates, and that puts pressure on households’ borrowing capacity,” she explained.

Wages are expected to rise more than previously thought, but that is not enough to offset the effects of higher interest rates, she said. This is depressing demand for owner-occupied homes.

The economists believe that home prices will rise by 2.8 percent over the whole of 2026 and by 2 percent in 2027. According to them, this means the housing market is clearly cooling down compared to recent years.

Furthermore, RaboResearch expects more new homes to be completed this year, but then that number will decline again. “Persistent bottlenecks, such as long lead times, grid congestion, and the nitrogen crisis, continue to plague the sector,” said De Groot. According to her, the effects of higher mortgage interest rates due to the war in the Middle East are adding to this.

She also anticipates that construction output will come under further pressure as construction costs rise due to increasing inflation. “That could make it more difficult to make projects financially viable.”

Due to the slowdown in the wave of sales of former rental homes and less new construction, market tightness will increase somewhat again next year. However, according to De Groot, price increases will remain limited due to higher interest rates and persistent economic uncertainty.