With increases of sometimes more than 20 percent, the housing market has overheated in recent years. Outbidding was quite normal and there was hardly any room left for starters.
But house prices have been falling again since last summer. The experts agree on the most important reason: the mortgage interest. This rose last year from just over 1 percent to over 4 percent. As a result, buyers can borrow less and bid less.
And that is reflected in the prices. Figures from Statistics Netherlands show that they fell by 4.4 percent last month. “We see this mainly as a correction of the extreme increases of recent years. It also fits in with the picture of the previous months,” says CBS chief economist Peter Hein van Mulligen.
Home buyers wait more often
Real estate agents’ association NVM, which has already observed a decline, also thinks that the market is returning to a new equilibrium. “In recent years, we have had to deal with a small supply of owner-occupied houses, low mortgage interest rates and a strong economy. So all signals were green. That led to extreme price increases,” says a spokesperson.
But last year, mortgage rates shot up. “And the war in Ukraine and inflation were added to that. As a result, people started to reorient themselves. Some decided to wait, because they think that prices will be even lower a quarter later. Those moving up also became more cautious.”
According to the NVM, it ensured that the great craziness became less. “But it is not really normal yet. The supply of owner-occupied homes remains tight and the large increases of recent years have not yet been compensated for.”
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Fall not over yet
Many home buyers and owners are probably wondering whether prices will continue to fall. Peter Boelhouwer is a housing market specialist at TU Delft and thinks that the fall in prices will continue for a while. “I expect prices to rise again by the end of the year. But then, for example, interest rates cannot rise in the meantime.”
Rabobank also thinks that prices will continue to fall this year and recently predicted a fall of more than 4 percent over the whole of 2023. “We also think there will be a small fall next year,” says Rabo economist Carola de Groot.
After that, the bank expects prices to stabilize. This is mainly because wages are rising. In recent months, wage increases have been agreed in collective agreements that regularly exceed 7 percent. “It gives people more to spend and that makes owner-occupied houses more affordable,” says De Groot. “This puts a brake on the fall in house prices.”
2023-05-22 14:55:15
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