Dutch Home Prices to Surge 5-8% in 2024

According to ING, Dutch home prices are set to rise due to higher wages, enabling buyers to make larger down payments and borrow more for mortgages.

According to a recent report by ING, home prices in the Netherlands are expected to increase by 5 to 8 percent this year. The bank predicts that by the end of 2024, owner-occupied homes will surpass the previous peak in July 2022. This surge in prices can be attributed to higher wages, allowing buyers to make larger down payments and borrow more for mortgages. With wages increasing by 6.9 percent in the last quarter of 2023 compared to the previous year, buyers have more purchasing power.

Dutch Home Prices to Surge 5-8% in 2024 | ING Report

The Netherlands Bureau for Economic Policy Analysis (CPB) also forecasts a rise in collective bargaining wages by 6 percent this year, with per-hour wages in the private sector expected to grow by 6.3 percent. ING notes that wage development is playing a significant role in driving up home prices. Additionally, mortgage interest rates are lower than anticipated, enabling buyers to borrow more and offer higher prices for homes. This, coupled with the housing shortage, has led to increased competition among buyers, resulting in overbidding to secure a property.

The trend of rising home prices is further fueled by the growing gap between housing demand and supply. The number of new homes being built has decreased, while the demand for housing continues to rise due to an increase in the number of households. As a result, homes are selling faster, prompting buyers to offer more than the asking price. After reaching an all-time high in July 2022, home prices in the Netherlands experienced a slight decline before resuming an upward trajectory in June 2023. Statistics Netherlands reported a year-on-year increase in home prices in January, with the average home costing 433,000 euros.

The housing market in the Netherlands is experiencing a significant uptick in prices driven by factors such as rising wages, low mortgage interest rates, and a shortage of homes. Buyers are willing to pay more to secure a property in a competitive market. The outlook for the housing market remains positive, with ING predicting further price increases and interest rate drops in the coming year.