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What has happened? The Dutch Central Bank (DNB) has confirmed that raising interest rates, a common tool for central banks to fight inflation around the world, has a negative impact not only on corporate investments, but also on real estate markets.
Forecast. DNB predicts that house prices in the Netherlands will fall by 5.1% during 2023. And next year they will decrease by another 3.8% on average across the country.
Quote. “It is expected that house prices will eventually fall by about 10% in 2025 compared to the peak in the summer of 2022. The losses should be short-lived, as “a small increase will follow in 2025”, - the regulator said.
Context. In the Netherlands, mortgage rates rose from a low of 1.64% in February 2022 to an average of around 3.9% in April 2023. The economic situation and the uncertainty of the future make it less likely for some people to make long-term purchases.
House prices in the Netherlands began to fall around the third quarter of 2022. From January to December of that year, prices were still 13.6% higher on average than at the end of 2021. In December 2022, home sales prices were 90% higher compared to June 2013, the lowest point during the previous economic crisis.
Source: NL Times
