Higher mortgage rates keep lid on rising house prices: ABN Amro

Dutch house prices will rise by 3% this year and 4% in 2027 as higher mortgage rates are limiting what buyers can borrow, ABN Amro economists said on Thursday.

The bank has stuck to the forecast it made in January, saying wage growth is slowing and most buyers are already borrowing 90% to 95% of the maximum allowed under lending rules.

The European Central Bank recently raised its deposit rate by 0.25% to combat inflation, and ABN Amro expects further increases this year, pushing mortgage rates up again.

Prices are still rising fastest in rural provinces, where homes remain relatively affordable, while growth in the cities is levelling off. The Randstad is still the most expensive region, but the gap with the rest of the country has narrowed since 2020.

The number of housing transactions will fall 3% this year and 4% in 2027, the bank said, partly because the wave of landlords selling off rental homes is coming to an end.

Construction falls short
The housing shortage will continue to prop up prices, the economists said. Although 27.6% more building permits were issued in the first five months of the year than in the same period of 2025, the number of completed homes fell 7.2%.

Higher rates are also hitting mortgage demand. Adviser De Hypotheker said total mortgage applications fell 3% year on year in the second quarter, the first annual decline in three years.

Buyers under 25 were the only age group to apply for more mortgages, doubling their applications year on year, often thanks to help from parents. The average mortgage was €365,850, just 1% higher than a year ago.