Amsterdam Property Market 2019
House prices are rising explosively
Amsterdam property prices have been on the rise since 2014 and the housing market is currently breaking all records. The engine behind this price increase is the low mortgage rates currently available. Buying a home is attractive because of the low monthly costs. year .
Tight on the housing market
The rise in house prices follows a period when housing was going through a deep crisis. The Dutch saw their house price fall and suddenly sat with a mortgage that was higher than the house value. During the housing crisis (2008 - 2013), consumers therefore kept their hands on the cut. This is clearly visible in the graph below (Land Registry) of the development of house prices.
During that period, the construction of new homes also stopped. Because there is not enough construction and because of increased demand for housing, there is currently a shortage on the housing market. This further increases house prices.
Regional differences remain
Although house prices are rising across the country, in the 4 major cities (Amsterdam, Rotterdam, The Hague and Utrecht) there is overheating of the housing market. Buyers move to surrounding places, which also means that house prices are rising faster. See graph (CBS).
In the greater part of the Netherlands, the average house price is not yet at the pre-crisis level (2008). This creates a dichotomy in the housing market between 'the Randstad' and the other provinces.
There are fewer houses sold
Increasing prices of homes in combination with a limited supply, ensures that fewer homes are sold. In the first half of last year 105,000 homes hands, compared to more than 114,000 in the same period a year earlier.
The number of homes sold also decreases because the catch-up demand is decreasing. People who have been waiting for the crisis or were unable to move because the mortgage was under water have since moved.
Expectation for the housing market in 2019
The shortage on the housing market has not been resolved for the time being. With the National Housing Agenda, the government is fully committed to new construction to reduce the shortage of owner-occupied housing. The realization of these plans is lagging behind, partly due to a lack of people and resources in construction.
Tightness in the housing market will cause house prices to rise further in 2019 . This means that the affordability of a owner-occupied home will come under further pressure. So far nothing new.
We also see, however, that consumer confidence is declining. Due to the strong price increase and limited choice ,more people find it a less good time to buy a house than last year. Uncertainty about economic growth also causes sentiment to drop.
For 2019 we expect the number of home sales to fall further . The number of transactions in the housing market is usually ahead of price developments. We therefore expect the rise in house prices to level off this year.
House price forecast of ABN AMRO and Rabobank
This is what economists say about the development of house prices in 2019:
- ABN AMRO expects average house prices to increase by 6% in 2019 (compared to 9% last year). Previously the bank still assumed 7% price increase. ABN AMRO the housing market 'come to rest' this year.
- Rabobank has also recently reduced its prognosis to 6%. The bank expects the average house price in 2019 to reach the historic limit of 300,000 euros. Update: this limit has already been reached in January .
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