High mortgage rates, the energy crisis and less favorable economic outlook affect the real estate market. The demand for home ownership is falling to expect the economists of Rabobank. More people are putting their home up for sale, while there are fewer buyers. As a result, the price drops.
First increase
“We expect an average increase in house prices of 15.2% for 2022. This growth is still very high due to a spillover effect last year and increases in the first half of the year,” said the economist. by Rabobank Carola de Groot.
2023 is expected to start with a rise in house prices, but this will gradually turn into a modest decline. “The capital market interest rate – and therefore presumably the mortgage interest rate as well – is expected to stay high longer. This makes owner-occupied homes less attractive, both to new buyers and movers, and to investors.” .
beats of bubbles
After nearly ten years of rising house prices, prices are therefore likely to fall again. The situation is reminiscent of 2008, when the real estate market collapsed. Many homes went under water because residents offered more than the value of homes when they bought them before 2008. House prices fell 21 percent when they sold, owners sometimes received less than they paid for themselves .
But that won’t happen now, economists predict. “As far as we are concerned, a comparison with that period is imperfect, not least because the lending and repayment behavior of buyers and homeowners is less risky today than before 2008”.
For example, it is no longer possible to borrow completely at zero interest and the purchase costs can no longer be co-financed.
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New construction
The real estate market is also tighter now than in 2008. For example, new construction production was then at a higher level of about 85,000 homes, while production now does not exceed 70,000 homes per year, according to Rabobank.
There is, however, a danger. There is a risk that more and more potential homebuyers will put their purchase wishes on hold because they expect homes to get cheaper.
Sell first
“This can encourage sellers to change their strategy, where they want to first sell their current home (for profit) before buying another one. As a result, the number of homes for sale can rapidly increase in a short time. while the number of sales collapses.. “
The projected decline in house prices could therefore ultimately be stronger than currently expected, analysts say. “The real estate market is and will remain a trusted market.”
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