Rabobank expects the price of Dutch houses to fall by an average 0.8 percent in 2021. This decrease is a small correction to the strong rise in prices that the housing market is still going through this year. Bank analysts expect house prices to rise by about 7 percent over the whole of 2020.
The housing market is currently still “running at full speed”, the bank sees. “There is no corona effect in the house price and sales figures yet.” Until July, houses were on average 7.1 percent more expensive than a year earlier. Also, nearly 7 percent more homes were sold than in the first seven months of last year. Rabobank bases this on the figures of the Central Bureau of Statistics (CBS) and the Land Registry. This concerns realized sales. Ownership of a house is then transferred to the notary. This means that Statistics Netherlands and Kadaster are about two months behind the actual market, where supply and demand may or may not meet in (provisional) purchase agreements.
The fact that the housing market does not yet seem to be hit hard by the corona crisis may be due to the government support packages for companies. “To date, these have proven to be quite effective in counteracting a sharp rise in unemployment among the group of potential home buyers.” Ultimately, unemployment will rise, due to a growth in the number of reorganisations and bankruptcies, Rabobank warns. Job loss and the fear of it will dampen the demand for homes.
Also, home investors and ‘home owners’ (homeowners who sell and buy again) will become more reluctant. As a result, the number of sales will fall from about 220 thousand this year to about 190 thousand next year. Investing in an apartment to rent has become less attractive due to the lack of tourists, expats and international students as a result of the corona crisis. The bank expects this to have an effect on the housing market, especially in student cities. As a result, it could possibly become easier in those cities for starters to buy a home.
In February, prior to the corona crisis, Rabobank predicted house prices to rise by 5.5 percent this year and 2.5 percent next year.
