Dutch housing market slowing down as buyers face rising interest rates
After recent years saw the Dutch housing market become increasingly competitive and inaccessible, new figures published by real estate association NVM indicate that, in the first few months of 2022, the property market in the Netherlands slowed down as those hoping to buy a house faced rising interest rates.
Rising interest rates lead to turning point in Dutch housing market
While many predicted that the coronavirus pandemic would lead to a housing crash, the reality is that house and rental prices across the county have risen at record-breaking rates over the past two years. By the end of 2021, house prices in the Netherlands were 20,4 percent higher than in December 2020.
Rising prices and the national housing shortage led to an exceedingly competitive market. An overwhelming majority of the houses sold in 2021 went for over the asking price, as overbidding became increasingly common. However, recent figures from NVM suggest that rising interest rates for mortgages mean 2022 might mark a turning point.
Fewer properties sold in the Netherlands in 2022 than in 2021
NVM has revealed that the first quarter of this year saw a notable drop in the number of houses that were sold: around 29.000 transactions were recorded between January and March 2022, in comparison to over 35.600 in the same period last year. The average price per square metre of all properties sold in the first quarter has also fallen slightly since the end of 2021, from 3.948 to 3.905 euros.
While overbidding remains prevalent, NVM’s figures suggest that the trend has become less excessive in recent months. In the final quarter of 2021, houses were bought for an average of 9,1 percent more than the asking price, compared to 8,3 percent from January to March of 2022.
Real estate agents note that, while signs are pointing to a slowdown in the national housing market, prospective buyers shouldn’t expect prices to drop further. “There is a lot of uncertainty in the market,” Makelaarsland director Gijs van Wijgerden told the AD, explaining that the demand for housing continues to outweigh the supply. “The great madness is over. But the prices are of course still unbelievably high.”