What factors influence the rise in property prices in the Netherlands
At the beginning of the pandemic, many experts predicted the collapse of the real estate market in the Netherlands. And while commercial properties really sagged in almost all countries, housing, on the contrary, showed unexpected results. After the cancellation of the lockdown, people began to actively buy houses and apartments, which contributed to the stimulus from the state in the form of low interest rates. As a result, there has been a rise in property prices, which will continue until the end of this year.
Against the backdrop of favorable mortgage lending conditions and the abolition of the tax for first-time home buyers, activity in the market has not declined. Price growth is also due to a shortage of objects. Central Bank analysts say that despite the fact that the annual increase in the cost per square meter will be less than last year, but still high, especially compared to the dynamics of previous periods. On average, experts promise a level of appreciation of about 5.5%. In 2021, the price increase was 10%.
The forecast has been revised upward since the previous revision, after home values reached 11.5% last month, the highest increase in 20 years.
The main reason for the jump was a housing shortage fueled by low interest rates. Despite the rise in price, rents sagged, due to an increase in people wanting to buy their own homes.
According to the data, there is a record low number of homes and apartments on the market, the lowest since 1995, when surveillance began. In February, 17500 housing units were put on the market for sale, a figure considered small for the activity observed in the segment. Now the price of new buildings is 433 thousand euros, on the secondary market objects can be purchased for 385 thousand euros. In Amsterdam, the price tag has risen by 7%, which is half as much as in Rotterdam. However, despite the slight increase in price, homes still cost in the range of 518 thousand euros, which is considered quite high. In order to improve the market situation, attention must be paid to the construction segment.
In just 3 months the price has increased by 15%, more than 60% were sold at a price higher than originally asked. The greatest price increase is observed in the northern part of the country, as the population is actively moving to the rural areas.
The Dutch economy is recovering well after a record slump in 2020. However, the market then began to grow strongly, and by the end of last year, GDP had already reached prequarantine levels.