House prices are rising and the number of sales increased “considerably” at the end of last year, according to estate agents association the NVM.
At a presentation of quarterly figures for October to December 2023, the NVM said the sale of apartments in particular had increased, while the median price for homes sold by its agents rose by 5.3% year-on-year to €434,000.
There have been signs that prices have been rising since mid-2023, after the market slumped 10% in real terms. However, international research by Oxford Economics published last week still cites the Dutch housing market as the most overpriced of Europe, compared with local rents and income. Climate risks for flooding and future-proof foundations are also not routinely priced in, to the concern of the AFM financial market authority.
“It is a mistake to think that it is very positive that prices have risen 5.3% again in a year,” said Lana Goutsmits-Gerssen, chair of the NVM’s housing group and an estate agent. “If you compare it with three years ago, you could say that it was exorbitant that prices rose 20% on an annual basis, so a rise of 5% is relatively better…
“But it is a shame that for first-time buyers, the housing market is getting ever more difficult to enter. You will not hear us saying that it is a very positive sign that we are so over-valued.”
At a presentation in Utrecht, the NVM however signalled that confidence in the property market has increased, many people are overbidding on advertised house prices – although some are still a negotiation – and that in most regions, property prices rose year-on-year. The main driver was an increase in sales of houses and apartments between €400,000 and €750,000, bumping up the median (mid-point) cost.
Chris van Zantwijk, vice-chair of the NVM’s housing group, who specialises in new-builds, said it is good news that more new-builds are selling as interest rates drop and make them more affordable but there are some concerns. Institutional investors are steering clear of new build, he said, with some choosing to invest abroad due to a less attractive local climate, while buy-to-let investors are also selling up.
“The period between [buying a new home and delivery] is an enormous attack on the buyers’ budget,” he added. “A lot of consumers cannot or will not absorb these bridging loan costs, which can be up to three and a half years [long].”
Another issue is that new build developments must sometimes wait to be connected to an overloaded electricity net in the Netherlands. “There is still too little building and new build is crucial,” he summed up.
Stefan Groot, a housing economist at the Rabobank predicted a recovery in house prices but called the NVM figures a mixed blessing. “This is not good news for house buyers that prices are rising again but conversely prices are rising because the affordability of homes has been improving – and that is good news,” he said. “With prices rising a little, new construction is becoming relatively more financially viable again and therefore, in the bigger picture, a more attractive market is good news.”
He said high housing prices in the Netherlands are driven by a housing shortage, as well as tax breaks for home owners, which have also been criticised by the European Commission and Dutch central bank DNB.
“From the point of view of affordability, you would prefer houses to be as cheap as possible,” he said. “But the high prices are a result of the fiscal advantages of owning a house – we still have generous mortgage interest tax relief – and extraordinarily little new building. If you look at broader well being, a lot of people really get stuck on the housing market. Assets, including houses, have relatively little tax in the Netherlands and that means that taxes on work and on pensions are relatively high.”
The NVM’s figures, based on sales contracts by member estate agents, are seen as a bellwether for official figures on all properties, which are reported by the Kadaster land registry and CBS statistics office on completion, several months later.
