Dutch home price increases leveling off; Up 2.4% year-on-year to record €506,000: NVM
Dutch home price increases are leveling off, but are still increasing. The average home in the Netherlands sold for a record €506,000 in the second quarter of this year, the realtors’ association NVM reported on Thursday. That is a year-on-year increase of 2.4 percent and up 3.4 percent compared to Q1. Boosted by landlords selling off rentals, a record 56,700 homes were listed for sale through NVM agents in the second quarter, directly translating into a higher number of home sales.
“The housing market is moving step by step towards a better balance. We see this reflected primarily in the record number of homes coming onto the market. Buyers have more choices to make a well-considered decision, while homes are still selling quickly. This shows that the underlying demand remains undiminished,” said Lana Goutsmits-Gerssen, chair of NMV Wonen.
She stressed that this relief is temporary and the housing shortage remains a structural problem. “There is still insufficient suitable supply available for, for example, first-time buyers or seniors. Only with sufficient suitable new construction and better flow can we keep the housing market accessible in the long term.”
The average selling price of an existing owner-occupied home increased only 2.1 percent year-on-year, a clear levelling off compared to price increases in recent years. This is due to the significantly increased housing supply, primarily caused by landlords selling off their rental properties, many of which are cheaper apartments.
But because demand remains high, new homes are still being absorbed quickly by the market. Without the rental sell-off, home prices would have risen significantly more sharply, the NVM said.
NVM realtors listed nearly 57,000 homes for sale in the second quarter, 9 percent more than the same quarter last year and the highest number since measurements began in 1995. “The usual seasonal peak in the spring is reinforced by the continued sale of rental properties and broader flow in the housing market. Economic uncertainty and geopolitical developments also appear to be prompting some homeowners to sell their homes earlier than planned,” the realtor association said.
The increased supply directly translated into a higher number of transactions. NVM realtors sold over 45,200 existing homes in the second quarter, 29.4 percent more thant he repvious quarter and a year-on-year increase of 6.6 percent.
The NVM noted that the increased supply of homes did not bring the market to a halt. Most homes still sold relatively quickly. "The increased supply is good news for the housing market. Buyers are getting a little more breathing room again, and flow is improving. However, we must not conclude that the housing shortage has been resolved. The current supply is primarily a temporary relief. Without sufficient new construction and a structural expansion of the housing stock, the pressure on the market will remain undiminished,” said Goutsmits-Gerssen.
The realtors also note that homes with a low energy label or poor maintenance are on the market for longer. Homes in higher price brackets also more often require a realistic asking price. “Sellers can no longer automatically rely on the exceptional market of recent years.”
In the new construction market, the realtors warned of a mismatch between the types of homes being built and demand. The supply of newly-built homes rose to over 20,100 in the second quarter, the highest level since 2015. But the number of new homes sold decreased by 7 percent year-on-year.
“The supply of apartments, in particular, is growing faster than sales, while fewer ground-based homes are being sold due to insufficient supply,” the NVM said. “The figures show that the challenge lies not only in having more homes, but primarily in adding the right homes in the right locations.”
