Construction & Housing Market•12 Sep ’23 21:19•Adapted on 12 Sep ’23 23:13Author: Thijs Baas
House prices will rise by about 2.4 percent next year, after a decline that lasted more than a year and a half. The main cause appears to be an average wage increase that was higher than expected, says Rabobank economist Nic Vrieselaar.
After the sharp increase in mortgage interest rates, potential home buyers were able to borrow much less money last year and therefore bid less on houses, says Vrieselaar. And that puts pressure on the demand for houses, with a fall in house prices as a logical consequence. It now appears that interest rates have not risen much further, while wages have risen sharply. ‘And given the very tight market, that will be reflected in the prices.’
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Anyone who thought that starters would have an easier time last year due to falling house prices will be disappointed, says Vrieselaar. These problems are coming back in full force, after they were still dormant last year. ‘First-time buyers are still confronted with very high house prices. They have fallen somewhat, but they are now at the level of the end of 2020 and the beginning of 2021, when we also found houses extremely expensive.’
‘It is a small beer: in one region it is around 2 percent, in the other region 3 percent’
Rabobank economist Nic Vrieselaar
In addition, if they had to pay for a house, they had to take out a mortgage at a much higher interest rate. ‘So those problems for starters also lurked in the background last year and we are afraid that they will return again.’ Vrieselaar does not expect major regional differences, after the decline last year was especially large in Amsterdam and Utrecht. ‘It is a small beer: in one region it is around 2 percent, in another region 3 percent, but that difference is a lot smaller than on the way down.’
Ultimately, it remains a prediction, but one thing is certain: you are always wrong by definition, says Vrieselaar. He just hopes that he is not too wrong and that the increase is indeed close to 2.4 percent. But you never know. ‘It could also be that we are completely wrong and that the decline continues anyway. At first it became smaller and now prices may rise very slightly. That could be a temporary revival.’
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Such a revival could be disappointing again by the end of the year, resulting in a further decline in house prices. But while the supply rose sharply last year, it is now declining again. Moreover, mortgage interest rates have hardly increased and incomes have risen faster. ‘That all indicates that it will all rise again. But: guarantee up to the door, so to speak.’
House prices will rise by about 2.4 percent next year, after a decline that lasted more than a year and a half. The main cause appears to be an average wage increase that was higher than expected, says Rabobank economist Nic Vrieselaar. (ANP / Peter Hilz)
2023-09-12 19:19:00
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