Rabobank upwardly adjusts its price forecast for the Dutch housing market: prices expected to rise 8.7% in 2018
In the first half of 2018 Dutch homebuyers paid on average 8.9% more for owner-occupied homes than in the previous year. This is higher than expected because, among other reasons, overbidding has become much more widespread. Prices are now forecast to rise by 8.7% in 2018 as a whole, Rabobank economists write in their Dutch Housing Market Quarterly. They had previously predicted an 8.0% price hike. In contrast with prices, home sales are declining a tad quicker than previously anticipated.
Senior housing economist Christian Lennartz explains: ‘The current high prices for owner-occupied homes are undermining buyers’ confidence in the housing market. Consumers who feel it is an unfavourable time to buy a house now outweigh those that feel it is still a favourable time.’ He expects that such waning confidence, together with increasingly limited choice for both first-time and next-time buyers, will dampen sales activity. ‘For 2018 as a whole we expect around 225,000 transactions, compared to 2017’s 242,000’.
Scarcity of housing is one of the main drivers behind the current price boom in the Netherlands, and increasing construction is therefore one of the main goals of the government coalition. This is a tough challenge, Lennartz explains: ‘In the first half of this year the number of building permits issued has declined. At this rate the construction of new homes will keep lagging behind household growth.’
Read the full Dutch Housing Market Quarterly on https://economics.rabobank.com/