Home prices climb higher than expected: Rabobank

Home prices climb higher than expected: Rabobank

Real estate prices will increase sharply this year and next year, economists at the Rabobank predic. Overall, the forecast for the Dutch economy has improved and that will push housing prices, according to the ANP.

According to housing market economist Carola de Groot, the explanation lies in the job market as well as in the ongoing housing shortage. “Especially unemployment is less than expected. Afterward, the housing shortage also plays a role in price development. On top of that, financing options for potential homeowners are favorable.”

The Netherlands is currently struggling with a large housing shortage while the mortgage interest rates are very low.

Rabobank predicts houses will become 8 percent more expensive this year followed by an average increase of 4 percent in 2022. At the end of last year, Rabobank estimated a 5.5 percent increase for 2021 and a 2.5 percent increase for 2022.

In January, housing prices rose sharply along with the number of sold houses. “This probably has to do with the transfer tax on homeowners under 35 being lifted as of January 1, 2021”, De Groot said. “Young adults who signed the purchase agreement in the second half of 2020 have largely canceled the transfer after the turn of the year in order to avoid the transfer tax.”

Experts have long warned that more houses need to be built to alleviate the pressure in the highly competitive Dutch housing market.

De Groot said that the lack of available houses will cause sales to drop in the near future. “Last year 236 houses were sold and for this year we expect about 220 thousand sales, followed by 210 thousand in 2022. This statistic is not due to reduced demand for owner-occupied houses but simply due to the absence of available houses.”