For the first time in three years, house prices have risen year on year. In the first quarter of 2014, prices were 1,2 per cent higher than this time last year.
This is according to the latest figures published Dutch Association of Real Estate Agents (NVM), based on the number of contracts for sale drawn up. NVM brokers sold nearly 25.000 homes in the first three months of this year, around 41 per cent more than in the first quarter of 2013.
NVM says the rise in prices is mainly driven by increased consumer confidence, better economic prospects and low mortgage rates.
While the number of house sales have been back up to pre-crisis levels since the start of the year, prices had stayed down, leading many people to sell their homes at a loss.
NVM chairman Ger Hukker said that while price recovery has made an appearance, there are definite variations between regions and types of houses. For example, prices for detached house were still down by 1 per cent, while corner houses and apartments were up by 2,2 and 2,9 per cent respectively.
According to the Dutch Land Registry, however, house prices have continued to fall this year. The Registry records sales at the time of transfer, not the drawing up of the contract, meaning their figures come around three months later than those of the NVM.
The likelihood of house sales dropping back again is much less, according to another study by Platform Wijzer. In a survey of Dutch homeowners, researchers found that 13 per cent are considering buying a new home within the next two years
House prices aren’t the only figure expected to rise: according to the housing market regulator Centraal Fonds voor de Volkshuisvesting (CVF), over the next decade housing associations will increase the average rent by about 70 euros per month.
This means the average monthly rent in 2022 will rise to 646 euros. Adjusted for inflation, that is 530 euros compared to 457 euros in 2012. In real terms, it’s an increase of 16 per cent.
Increasing rent on top of expected inflation is possible thanks to the broader rental policy that the Dutch government has allowed in the rental market.
The regulator also predicts a decline in the construction housing by a third, to 20.000 homes per year from 30.000 over the previous 10 years. This change will maintain the financial health of the housing corporations despite the higher taxes the government has imposed the sector.
Sources: Volkskrant, Financieele Dagblad, The Government of the Netherlands