Friday 17 September 2021

House price rise a new record in July

Photo: Dutch News

House price growth has set more new records, with the amount paid rising by 16.3% year-on-year.

The CBS Dutch statistics office and Kadaster land registry report that in July, houses were almost a sixth more expensive than in July last year, the largest spike since October 2000.

In order to get a house in the overheated market, buyers are often having to overbid by more than €50,000, the estate agents association NVM told NOS broadcaster.

Although NVM chairman Onno Hoes called for the government to build more housing, due to a shortage of some 300,000 homes, economists have also pointed to financial causes.

The DNB said earlier this year that there were clear signs of problems, with ‘more money than ever’ available as people had maintained their jobs thanks to government measures but had saved more, while interest rates had dropped.

A spokesman for the DNB told DutchNews.nl. ‘The Dutch housing market is overheated and is threatening to get stuck entirely…Firstly, new houses must be built to do something about the lack of housing. But it’s not just about building. The spiral of higher house prices and attached mortgage debts is driven mostly by low interest rates in combination with the mortgage tax break, generous lending norms and subsidies for first-time buyers.’

The body believes that urgent reform, as quickly as the start of next year, is necessary to scrap these measures and tax breaks, treat houses as taxable wealth, and make banks build in more generous risk protection into their loans. This would lead, the government has admitted, to a rise in mortgage costs, especially for loans of more than 55% of house value.

According to land registry figures, more houses have also been sold this year than last year, with 7% more sales in the first seven months of 2021. In July, however, the number of year-on-year sales fell by 16% to 19,043.

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