Both interest rates and inflation are soaring. House prices have almost doubled since the low in 2013. Is the bubble about to burst? Opinions are divided. “There is simply too much demand.”
“An increase in interest rates and possibly also unemployment. You can see that reflected in house prices,” says housing market economist Stefan Groot of Rabobank. against the Telegraph† But there is an important difference with the crisis of 2008, when unemployment was high. “Higher mortgage rates always have a gradual effect on lower house prices, that does not happen overnight. Rising unemployment has a faster effect.”
Director Taco van Hoek of the Economic Institute for Construction (EIB) does not expect a crash on the housing market, he tells the newspaper. “As long as there are not enough homes added, prices will not fall.”
Philip Bokeloh of ABN Amro is less convinced. “A recession can push downward, plus a further rise in interest rates or new uncertainty about the tax treatment of the owner-occupied home.”
Oscar Noorlag of Van Bruggen Adviesgroep also thinks that house prices will come under pressure. “It does ensure that there is more realism in the housing market and that probably means that the absurd price increases of recent years are a thing of the past. I also do not rule out a slight price correction if the current economic conditions last longer. ”
