House prices on course to hit new peak
Dutch Housing Market Quarterly
The growth in the Dutch housing market continued unabated in the first quarter of 2017. The number of sales in the first three months of the year reached 55,911 homes, well over 30% more than in the first quarter of 2016. At the same time, as the rise in the number of transactions, the number of owner‐occupied homes for sale also rose, which meant that shortages remained at roughly the same level. This contributed to the rise in house prices in the first quarter of 2017 compared to the last quarter of 2016 – by 2.0%. The year‐on‐year rise was no less than 6.8%.
In view of the strong growth in the first quarter and taking account of economic growth, rising incomes and persistently low interest rates being forecast, we are adjusting our expectations for this year: for 2017 as a whole we are assuming 225,000 to 235,000 sales and price rises of around 6.5%.
On the mortgage market, new approvals rose further during the first quarter of 2017. Higher repayments and tighter restrictions in the loan‐to‐value regime contributed to the total gross mortgage debt levelling off in the fourth quarter of 2016. Rising competition between mortgage providers is expected to help keep mortgage rates low in 2017 too.
In view of the ever growing housing shortage and sharp price increases this has caused, it is for the new government to work together with municipalities, housing associations, commercial parties and private developers to come up with new solutions for the housing market. A crucial task here will be to build affordable homes in both the owner‐occupied and rental sector.
The full Dutch Housing Market Quarterly report can be found here.