Housing prices in the Netherlands keep rising
26 april 2018
The first quarter of 2018 shows that the Netherlands is suffering from a stagnation in the construction of new housing, price increases and a lack of supply. The transaction price rose to 273,000 euros for the average property sold, which is 9.7% higher than a year earlier. The shortage of available apartments translates into a substantial price increase of almost 16%. In all other housing types the price development is less strong than the national average.
This is clear from the figures released by the NVM (Dutch Association of Real Estate Brokers) over the first quarter of 2018. In recent years, attention has often gone to the Amsterdam region. Although prices have risen sharply in the past quarter compared to a year earlier, there are now regions where the price of homes sold has risen faster last year. Like The Hague with more than 24% and to a lesser extent Rotterdam with a plus of 15%. NVM Chair Ger Jaarsma: "The demand in the region of The Hague has risen sharply in the past year, while the supply is far from sufficient to meet the demand." In addition to the regular house seeker, an increasing number of expats attend the viewings. In centrally located neighbourhoods., the percentage of expats is about 40% to 50%.
Below please find the full article by NVM on the housing data (source: NVM):
New building construction needs boost and fast
Consumer increasingly squeezed by overheated housing market
Stagnation in the construction of new housing, a shrinking supply of owner-occupied properties on the market, hefty price increases, and not enough properties being released into the market by housing corporations to cool down the overheated market: these are the drivers behind the present housing market and the reason why it's in danger of grinding to a halt. NVM Chair Ger Jaarsma is strongly in favour of far-reaching measures aimed at making the housing market healthy again. 'All the parties, including governments, builders & developers, and NVM real estate brokers and experts, have an important role to play in this regard', he explains. 'If we get together and work together, we can reverse the downward spiral and once again ensure a promising housing future for everyone in the Netherlands.'
Although the housing market is still flourishing in some regions, it's increasingly moving in the wrong direction in many parts of the country. Fewer properties are coming onto the market, prices are rising sharply, and consumers not only have fewer and fewer choices but are also being forced to dig ever more deeply into their pockets to purchase an owner-occupied property. 'If things continue this way, the system will soon go into gridlock', says the NVM Chair. 'Of course, the NVM aims as always to play a constructive role in thinking things through and discussing measures aimed at turning the tide. And this applies to existing properties, new construction, rental properties in the regulated and unregulated sector, the transformation of commercial and agricultural real estate, and changes to the financial and tax framework that applies to home rentals as well as purchases. It's high time we came together to pool our efforts and resources.'
Decrease in number of transactions gaining speed
The downward trend in the number of existing owner-occupied properties sold by NVM-registered estate brokers reported by the NVM at the end of 2017 is gaining speed in 2018. Almost 13% fewer properties changed hands in the most recent quarter of 2018 compared to a year earlier. NVM estate brokers sold a total of 33,800 properties (out of a total market of 48,000), which was almost 5,000 less than the previous year. 'The decrease in the number of properties sold was the strongest in the apartment sector, namely 19%', explains Jaarsma. 'But there was also a clear downward trend in the number of sales of other property types as well.'
The number of transactions decreased in most of the NVM regions. The decrease in the number of sales is primarily being seen in the less expensive price categories. 'That part of the market is drying up very quickly', says the Chair. In the price categories upwards of 500,000 euros, the number of transactions actually increased by at least 10% compared to the previous year. 'The supply side is the primary driver behind the decreasing number of sales. There are simply too few properties being offered for sale to meet the demand. Consumers are waiting with the sale of their own property until they have found another property for themselves.'
NVM expects housing supply to continue to decrease and prices to increase
In part due to the stagnation in new building activity, the NVM expects the number of transactions and the number of owner-occupied properties offered on the market to continue to decrease. 'As a result, prices will also continue to rise', explains Jaarsma. 'It's high time something happened. Zoning procedures in the urban centres as well as elsewhere must be drastically shortened or else the housing market will go into lockdown. I'm asking the present government to take appropriate measures to prevent this from happening. If new building activity continues to stagnate, we need to speed up the transformation of commercial properties into residential properties, and the same applies to agricultural and rural properties. We also need to ensure that housing is "future-proof", suitable for the needs of all the groups targeted and available in the locations where it's needed. We are now seeing a great many small apartments being built, but that is only a temporary solution.
Due to the higher housing prices, many people cannot afford enough square metres of living space. But the situation may soon change and people will then want more space and more facilities, at which time those same small apartments will become "worthless". The NVM Chair also appeals to the housing corporations to speed up their efforts aimed at making more of their properties available for the market. 'We must make sure that starters also have enough housing options available to them in the present market. Whether that happens in the owner-occupied sector or the unregulated rental sector is something that needs to be looked at per region', argues Jaarsma.