Dutch house prices will rise again next year as overbidding returns
The long-awaited correction to prices on the Dutch housing market turned out to be smaller than expected, according to new figures from ABN AMRO. The Dutch bank has announced that after a few months of falling, house prices are now stabilising, and will likely rise again next year.
ABN AMRO revises its 2024 housing market predictions
After several months of falling prices on the Dutch housing market, the October monitor from ABN AMRO reveals that the price corrections appear to be over. “House prices have risen slightly over the past few months and are stabilising at a higher level than thought,” Bram Vendel, a senior economist at ABN AMRO, wrote in the press release. “Mortgage interest rates are now high, but remain stable. We expect them to fall in 2024.”
The average house price is still 4,3 percent lower than at the peak in July 2022, but this is higher than economists were expecting. ABN AMRO has therefore significantly revised its projections for the Dutch housing market.
This year, the bank expects prices to fall by 3 percent overall, rather than the 5-percent drop that was previously estimated. Next year, the bank thinks that rather than falling by 3 percent, prices will actually rise by 2,5 percent. According to CBS, house prices in the Netherlands rose 0,6 percent in August 2023, the fourth month in a row to see an increase.
ABN AMRO noted that there are fewer homes for sale than six months ago, and that the average time a home is on the market before being bought is also decreasing. Viewings are becoming busier, and overbidding is once again becoming a feature of the purchase process. The proportion of houses that are now sold for over the asking price is 42 percent. In December 2022 this proportion stood at just 10 percent.
Energy-efficient homes recovering value more quickly in the Netherlands
Vendel noted that homes with low energy-efficiency ratings were disproportionately affected by the sluggish market, seeing bigger price declines and regaining value more slowly. He said this was down to the recent rise in the cost of energy, which has made people more aware of the importance of energy efficiency when buying a house.
This will be reinforced next year when new legislation will ensure that the energy consumption of a home will also be included in the calculation of maximum borrowing allowances for Dutch mortgages. In a nutshell, people will be allowed to borrow more for more energy-efficient homes.