Overbidding Trend Boosts Dutch Home Sales Prices for Second Quarter

Explore the growth of Dutch home sales prices in the second quarter of 2023, fueled by the resurgence of overbidding. Find out how the market is rebounding and the impact on the housing market's tightness.

The third quarter of 2023 saw a slight increase in existing owner-occupied home prices, marking the second consecutive quarter of growth, according to the latest report by the realtors' association NVM. This positive development suggests that the period of home price decreases has come to an end. Furthermore, the tightness in the housing market has intensified, leading to a resurgence of overbidding among buyers.

Overbidding Trend Boosts Dutch Home Sales Prices for Second Quarter | ogusyis

During the third quarter, the average price of an existing home reached €422,000, representing a 1.7 percent increase compared to the previous quarter. Nevertheless, when compared to the same period last year, the average sale price still remained 1.7 percent lower. Despite this slight dip, NVM realtors managed to sell 33,500 existing owner-occupied homes in the third quarter, which reflects a 2.4 percent increase from the previous year.

However, the supply of homes available for sale has shrunk by 9 percent compared to the second quarter and 18 percent compared to the third quarter of the previous year. Consequently, the shortage in the owner-occupied housing market has expanded once again, leading to increased competition among buyers.

In contrast, the housing construction sector has been grappling with rising material and labor costs. This predicament has made newly built homes increasingly unaffordable for potential buyers. Statistics Netherlands (CBS) reported that the number of newly built homes sold plummeted by over 50 percent in the second quarter. Despite a slight recovery in the third quarter, sales of newly built homes remained historically low, as stated by the NVM. In total, NVM realtors managed to sell over 5,400 newly-built homes, marking a 14 percent increase from the previous quarter. The average price for these new homes stood at €474,000.

In conclusion, the Dutch housing market has experienced a modest resurgence in existing home prices, which has brought an end to a period of decline. Additionally, the intensified tightness in the housing market has led to a renewed trend of overbidding among buyers. However, the housing construction sector continues to face challenges due to rising costs, making newly built homes less affordable for potential buyers.