House price explosion of 15.2 pc

A cooling is not yet in sight. Over the last three months of last year, Statistics Netherlands noted a price explosion of 20.4% for existing owner-occupied homes. The statistical office has not signaled such a strong increase since it started to systematically track house price increases a quarter of a century ago. Predecessors of real estate agency NVM have only reported larger increases in the 1970s, when inflation was approaching 10%.

The price explosion is partly due to the fact that demand is much greater than supply. Figures from the Land Registry, on which Statistics Netherlands relies, show that 20,559 housing transactions were registered in December. That is almost a quarter less than a year earlier. Viewed over the whole year, the decrease was not too bad: 4%. Before the summer, the housing market was considerably less heated.

In June 2013, house prices reached a low point. Since then, houses have increased in value by an average of 85%.

Statistics Netherlands last recorded such a high increase in the millennium year 2000. Then the house price rose 18.2%. Even then, it was mainly due to the high demand and the limited supply, was the conclusion of a parliamentary inquiry years later. At the time, people were also able to bid heavily due to the good labor market, falling interest rates and attractive mortgage types. However, the researchers mainly blamed the government, which did too little for housing and speculated with building land.

Ten days ago, estate agents’ association NVM also released figures for the fourth quarter. The transactions of affiliated brokers showed a price increase of 20.7% compared to the last quarter of 2020. Statistics Netherlands bases its figures on registrations of deeds of sale in the land register. These figures are one or two months behind sales, but they do give the clearest picture of the housing market.

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