According to a new report by real estate researcher Calcasa, in the fourth quarter of 2018, house prices dropped in almost 20 percent of municipalities, the majority of which are located in the provinces of Groningen, Utrecht and Limburg. During the first three quarters of 2018, house prices fell on a quarterly basis in less than five percent of Dutch municipalities.
It seems as though the overheated housing market in the Netherlands is finally cooling off, with house prices levelling off and in some places even falling slightly. Of course, it may not feel this way, as prices did increase throughout 2018. Calcasa points out that although prices did go up, the increase was reduced in the last four quarters.
According to Rogier van der Hijden, a spokesperson for Calcasa, the housing market tends to slow down in the fourth quarter and prices fall in some areas. However, this time there were a lot more price decreases than usual. In Q4 of 2018, the house prices across the country only rose by one percent. This is the smallest increase since Q1 of 2016, and much less than previous Q4, a sign that the market is cooling off. The yearly average increase was, however, still hefty at 9,3 percent.
Some of the reasons for the new developments in the housing market, according to Van der Hijden, are the decrease in consumer confidence and the fact that homes are becoming too expensive. Calcasa reports, however, that historically speaking, the affordability of properties is still very good and even better than it was in 2008. In 2008, 27 percent of a home buyers net monthly income would be spent on living costs, whereas nowadays this figure is only 16 percent, thanks to the extremely low-interest rate on mortgages.
Although they are still affordable, fewer houses are being sold. In Q4 of 2018, there were 95.000 properties for sale, a decrease of 66 percent compared to the end of 2012, when the number of houses on offer peaked at 282.000. The number of apartments on offer has fallen even further, by 78 percent since the end of 2012. The reduction in house sales can partly be explained by the decrease in available properties on offer.
The decline in property sales began in the province of North-Holland and Utrecht in Q1 of 2018, with the trend eventually spreading to all other provinces in Q4. The province with the biggest decline in house sales in Q4 of 2018 was South Holland with -10,1 percent. Looking at Dutch cities specifically allows us to see a decline in sales starting in Amsterdam in Q4 of 2017 already, with cities such as Rotterdam and The Hague following suit in 2018.