The rise in housing prices in the Netherlands is in the TOP-4 in the EU

The residential real estate price index in the primary and secondary market in the first quarter of 2022 was 19,5% higher than a year earlier. Accordingly, the Netherlands falls into the top four countries with the largest increase in housing prices in the European Union. This conclusion can be drawn on the basis of data from the Central Bureau of Statistics (Centraal Bureau voor de Statistiek, CBS), the Land Registry (Kadaster) and Eurostat (Eurostat).

Real estate prices in the EU

Average house prices in the European Union grew by 10,5% in the first quarter of 2022. After the Czech Republic (+24,7%), Estonia (+21,0%) and Hungary (+20,6%), the largest increase in housing prices was observed in the Netherlands.

Such a significant increase in prices in the real estate market is not a new phenomenon. Price increases were also observed in the fourth quarter of last year. Moreover, since last year, the rise in prices in the Netherlands has practically stabilized. In particular, according to CBS, housing prices rose by 18,8% in May compared to the same period a year earlier. But it was less dramatic than 19,7% a month earlier. At the same time, Peter Hein van Mulligen, chief economist at the Central Bureau of Statistics, called the May 18,8% "historic high".

What's next?

Rising house prices are not exclusively a European problem. Homeowners in a number of countries find it difficult to pay their mortgages. The effects can be seen in countries like Canada, the US and New Zealand, where recently "overheated" housing markets have suddenly cooled down.

The real estate agents association NVM reports a sort of sluggish market in April. Brokers said home prices are falling quarterly for the first time in years. The fact that the Central Bureau of Statistics has not yet been able to report a price reduction is due to different approaches to data analysis. CBS and the Land Registry look at home prices at the time the keys are handed over, while brokers report home prices at the time of the sale and purchase agreements. In practice, months can elapse between these two events.

Also, according to NVM, the number of houses for sale in the Netherlands is increasing, that is, the supply is clearly growing, while demand is decreasing. The rate of growth in housing prices is slowing down, finding a house is now a solvable task, although the choice still leaves much to be desired. Against this backdrop, mortgage interest rates are rising, and so the amount people can borrow is decreasing.

Comparison of the situation in the primary and secondary market

In the first quarter of 2022, the transaction price of a new building was on average 14,8% higher than in the same quarter a year earlier. The price of housing in the secondary market was on average 20,3% higher, which is the highest since 1995.

In the first quarter of 2022, 43 properties were sold on the secondary market. This is 923% less than in the same period last year. The number of housing sold in new buildings is 34,1, i.e. +6% compared to a year earlier. And this is the largest number of new-build homes sold in the first quarter since 884.

Overall, 30,8% fewer properties were sold in the first quarter. This is the fourth consecutive quarter in which the total number of sales transactions has been declining compared to the same period a year earlier.