Dutch Home Prices Surging: Up 11% by 2025, ABN Amro Predicts

ABN Amro forecasts a rapid 11% increase in Dutch home prices by 2025, driven by rising wages and lower mortgage rates. Read more here.

Dutch home prices are on the rise once again, with ABN Amro predicting an 11% increase by the end of 2025. The bank expects home prices to rise by 6% this year and 5% next year, bringing them closer to the record levels seen in July 2022. This upward revision in forecast is mainly attributed to higher wages, falling mortgage rates, and government incentives such as the increased first-time homebuyer exemption and National Mortgage Guarantee.

In the first two months of this year, the number of home sales has increased by 13% compared to the same period last year. This surge in sales can be partly attributed to investors selling off properties more quickly, as private rental becomes less attractive due to government measures. However, ABN Amro notes that overall transaction numbers remain low, with existing home sales falling below the five-year average.

The shortage of newly built homes is also a concern, with only 17,000 sold last year compared to the five-year average of nearly 29,000. This shortage is attributed to a lack of building permits and an overcrowded power grid, resulting in only 73,000 homes being built last year. To meet national targets, around 115,000 homes need to be built annually.

Experts warn that proposed regulations on rental properties in the private sector could further slow down housing construction. These regulations may make building homes less profitable for investors, exacerbating the housing shortage.

The Dutch housing market is experiencing a rapid increase in home prices, driven by various factors including higher wages, falling mortgage rates, and government incentives. However, challenges such as low transaction numbers and a shortage of newly built homes continue to pose concerns for the market's future.