Rabobank Group

17-2-2010 | Press Releases

In conjunction with the cautious recovery of the Dutch economy, the Dutch housing market now also appears to be climbing out of the slump. After a sharp fall in the number of transactions in 2009, there has been a slight increase recently and the number of transactions is expected to rise further this year. Dutch house prices are currently stabilising. Rabobank forecasts a slight increase in house prices in the second half of 2010. Average house prices in the Netherlands will, however, still remain lower throughout 2010 than in 2009. This is the result of the decrease in the price level that occurred in the course of 2009. This and other information is presented in the Rabobank Dutch Housing Market Quarterly published today.

The negative development that the Dutch housing market encountered in 2009 appears to have been broken. While the number of transactions is set to increase further this year, the figure will not reach the pre-credit crisis level. Dutch house prices will also not return to the level of the third quarter of 2008 for the time being. According to the Price Index of Existing Houses (PBK), which is a joint publication of Statistics Netherlands and the Dutch Land Registry Office, Dutch house prices have decreased cumulatively by 6% since the third quarter of 2008.

Affordability of Dutch housing has peaked
The affordability of houses in the Netherlands improved considerably in 2009. This development has, however, now peaked. House prices and interest rates are expected to once again begin rising in the course of this year. This will cause new home purchase costs to start rising again. In contrast, gross incomes in the Netherlands will not increase in tandem and are, in fact, expected to stabilise this year. Affordability will decrease further over time due to rising house prices and increasing interest rates. This is particularly not good news for first-time homebuyers. The Rabobank economists say it means that, just like before the credit crisis, it will either be more difficult for them to buy a home or that they will be forced to settle for a smaller home or one in a less popular area.

Cautious turnaround on mortgage market
While the effects of the credit crisis are very tangible on the mortgage market, there are also signs of a turnaround in this area. Measured by the amount of mortgages provided, the market shrank by nearly one third in 2009. While all the market players sold fewer mortgages than before the credit crisis, not all of them were hit equally hard. Foreign providers suffered the hardest blow and saw their joint market share fall from between 7 and 8% to less than 1%. Dutch market leader Rabobank increased its market share and currently provides 30% of all mortgages in the Netherlands. The mortgage market in the Netherlands is expected to return to limited growth in 2010.