Every year I give my forecast for house prices and mortgage interest rates for the following year. But before making my prediction for the year 2022, a quick look back at the predictions I made a year ago.
Looking back on house prices 2021
Last year I predicted the following about house prices in 2021:
“I therefore expect that house prices will continue to rise in 2021 as well. The increase will be between 5% and 10%. This does mean that the average house price for an existing home will go to around €380,000! An average of around €470,000 will be paid for a new-build home.’
House prices have certainly increased in 2021. According to those in the know, there is even talk of an overheated market. The average house price for an existing home is now around €420,000. My prediction was nice, but too cautious.
Looking back on mortgage interest 2021
Let’s see what my prediction was regarding mortgage rates:
However, I expect mortgage interest rates to fall even further in 2021. As in 2020, this will certainly happen in the first months of the year. Of course, it’s not about large percentages. In any case, it wouldn’t surprise me if the mortgage interest rate for mortgages with NHG for a fixed-rate period of 30 years falls below 1.5% and for a fixed-rate period of 20 years even below 1%!’
The graphs below show how the (lowest) mortgage interest rates actually developed in 2021.
Mortgage interest in 2021 for mortgages without NHG
Mortgage interest in 2021 for mortgages with NHG
Source: mortgage interest rates: ActueleRentestands.nl
It happened very quickly in 2021: the 30-year fixed mortgage interest rate dropped below 1.5%. I could put a nice check mark behind this prediction. My prediction that the fixed 20-year mortgage interest rate would fall below 1% has (unfortunately) not been met.
Forecast housing market and mortgage interest for 2022
The mortgage interest rate will rise slightly in 2022 (no more than 0.5%). It certainly won’t be much. In addition, it will not affect house prices. There are too many banks that would like to take out a mortgage. However, the fish pond is getting smaller and smaller. So it’s a “fight” to catch a fish in 2022.
House prices will continue to rise in 2022. I expect the average price of an existing home to go to €500,000. This means that for new-build homes, the average price will be around €580,000.
I also very often come across buying brokers who advise their customers to bid above the asking price without resolutive conditions. These brokers don’t care about their customers. Moreover, an offer of more than €100,000 above the asking price has become no exception. I have already heard of amounts from €150,000 to even €200,000 above the asking price (asking price is then around €800,000).
If this trend continues, we will have a really big problem in the Netherlands.
More Outlook 2022
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