Rabobank: House prices to keep rising in 2017
The growth in the Dutch housing market will continue throughout 2016 and 2017. While the rise in the number of house sales will flatten slightly, house price rises will in fact accelerate; from 3½ - 5½% in 2016 to 5 - 7% in 2017. If expectations are realised, this will be the strongest price rise since 2002. Even so, affordability of owner-occupied homes remains good. These are the views of the Rabobank economists in the Dutch Housing Market Quarterly published today.
Low interest rates, more jobs and higher confidence
The reasons for the growth in the housing market are varied. Pieter van Dalen, housing market economist at Rabobank: ‘Rising purchasing power, growing employment and ever higher consumer confidence are pushing up demand for houses. Besides, more and more homeowners are moving into positive equity, interest rates are expected to remain low in 2016 and 2017 and the Nibud standards will be slightly more relaxed this year than in 2015. We therefore expect to see further rises in house sales and increasing shortages on the market. The relatively low number of new homes being built is also having an impact.’
Affordability remains good
Rising house prices will particularly benefit homeowners whose mortgage loan is higher than the value of their home. Quite a number of them will move into positive equity and this will give them greater flexibility. For first-time buyers, affordability is declining. In a historical perspective, however, owner-occupied homes will still be affordable for first-time buyers this year and next.
Significant regional differences
The popularity of the cities in the northern part of the Randstad is pushing up house prices there fastest. Van Dalen: ‘The differences within the Netherlands are particularly striking. Amsterdam and Utrecht above all are so popular at present that affordability in these cities has worsened considerably. The same is true to a lesser extent for cities in the south of the Randstad and beyond. We therefore see house buyers looking further afield in neighbouring regions, and so the growth in the housing market is slowly but surely filtering through into the Netherlands as a whole.’
The Dutch Housing Market Quarterly can be found at: www.rabobank.com/economics