Rabobank in business

20-2-2008 | Press Release

House prices in the Netherlands rose by 3.3% in 2007. Rabobank forecasts a further increase of 3¼% this year on a 12-month basis. The increase could be greater in regions that are facing considerable unbalanced growth in the housing supply and demand. Examples include the economically strong regions of Amsterdam and Utrecht that attract large numbers of workers. Differences can also arise between popular and less popular categories of homes and residential areas. These and other results are presented in the “Dutch Housing Market Quarterly” that was published today.

Economic growth is levelling off
The Dutch economy remains robust in 2008. The outlook is, however, less positive than it was last year. While the Dutch economy is moving forward at full speed, growth is expected to slacken this year and amount to 2¾%. Unemployment will decrease further and employers will encounter shortages in the labour market. This could cause wages to rise in 2008. Rabobank furthermore anticipates that the interest rate hikes of recent years will come to an end in 2008. This will have a favourable impact on the affordability of private homes. The average priced home will, however, remain beyond the reach of consumers who have an income that is 1.5 times the median income and do not have equity. 

Threat of stagnation
Despite the current favourable economic climate, the Dutch housing market is in danger of stagnation. 3.5% fewer private homes were sold in 2007 than in 2006, while the number of homes for sale has increased by 5.4%. These developments negatively impact the circulation in the housing market. The rise in the production of newly built homes is a positive development that reduces the quantitative imbalance of growth. 

Ageing population
While there will be regional differences in the country, there will be a growing percentage of seniors in the population throughout the Netherlands in the years ahead. This development will also clearly affect the housing market. Seniors do not move as frequently as young people and this is unfavourable for circulation in the housing market. Health problems and the loss of a partner are the principal reasons why older people decide to move. Considering that the average Dutch citizen will remain in reasonably good health until the age of 75, the baby boom generation is not expected to begin creating movement in the housing market until 2020.