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MARKET TRENDS IN THE FOURTH QUARTER OF 2023
According to a recent analysis of the NVM housing market figures conducted by NVM subsidiary brainbay, the Haarlem housing market witnessed a continuation of the upward trend in house prices and a decrease in supply during the last quarter of 2023. These findings reveal a dynamic market with growing confidence among buyers and sellers alike.
During the fourth quarter of 2023, NVM real estate agents recorded nearly 36,500 transactions of existing homes, marking a significant increase of 12% compared to the same period in 2022. This surge in transactions was accompanied by a modest uptick in the median selling price, which now stands at €434,000 and has seen a consistent increase over the past three quarters. Additionally, the average selling price is currently 5.3% higher than in the fourth quarter of 2022.
As the quarter drew to a close, the supply of homes for sale dwindled by 11% compared to the previous quarter and a substantial 26% compared to the same period in 2022, further exacerbating the market’s shortage.
Given the prevailing scarcity in the housing market, the NVM anticipates further price increases. To illustrate, in the Haarlem region alone, prices have seen a notable rise ranging between 6% and 12% over the past 12 months, varying depending on the neighborhood.
AN OPTIMISTIC OUTLOOK FOR THE DUTCH HOUSING MARKET IN 2024
The latest Housing Market Monitor released by ABN AMRO in January 2024 presents an optimistic outlook for the Dutch housing market. Bram Vendel, an economist at the bank, shares his insights and predictions, signaling an upward trend for homeowners and potential buyers.
With a note of optimism in his voice, Vendel declares that house prices are rebounding following a period of stagnation. The decrease in mortgage rates since October 2023, alongside a steady rise in incomes, is propelling this positive trend. A 4% increase is forecasted for the upcoming year, significantly surpassing previous estimates. Moreover, this positive momentum appears set to continue until 2025, with a further 3.5% uptick predicted.
As the housing market gradually springs back to life, mortgage rates are steadily declining. With an expected further reduction in 2024, homeownership becomes more accessible to a broader segment of the population. This is particularly advantageous for individuals who have been awaiting the opportune moment to enter the housing market.
Notably, it’s not just prices that are on the rise; the volume of home purchases is also expected to surge, contradicting earlier forecasts. This surge is attributed to favorable conditions, with sellers increasingly inclined to purchase a new home before offloading their current one. Consequently, we’re witnessing a market pace reminiscent of times past, with more homes fetching prices above their asking rates.
Furthermore, the new lending standards introduced in 2024 herald some changes. While maximum mortgage amounts may see a slight reduction for many, homes boasting good energy labels stand to benefit from more favorable terms. Meanwhile, the gifting exemption for first-time buyers may be disappearing, yet the family mortgage emerges as a potential alternative financing avenue poised for increased popularity.
INFLUENCES ON HOUSE PRICES: STRONGER INCREASE IN NOMINAL WAGES
In the latest insights from RaboResearch, senior economists Carola de Groot and Nic Vrieselaar shed light on an unexpected twist in the Dutch housing market. After a period of concerning declines, there appears to be a glimmer of hope on the horizon.
The downward trend in house prices suddenly appears to be tapering off earlier than anticipated. In June and July, prices even stabilize, marking a positive departure from previous projections. The reasons behind this unforeseen stabilization are intricate yet intriguing. Robust increases in nominal wages afford potential buyers greater borrowing capacity than initially forecasted. Consequently, this exerts upward pressure on house prices within an already constrained market.
Projections for house prices have been adjusted, with an average decline of 3.5% anticipated for this year, followed by a projected increase of 2.4% in 2024. Despite these favorable developments, the supply remains insufficient, largely owing to an anticipated downturn in new construction projects. These disparities continue to pose challenges for many households in their quest for suitable housing.
CHALLENGES IN HOUSING SUPPLY AND THE SEARCH FOR SUITABLE HOMES
Despite this, sentiment in the housing market does not seem to deteriorate further. Confidence remains relatively stable, and the number of active searches is on the rise. However, challenges persist, including limited supply, high demand, and consequently, escalating prices.
For expert, personalized advice and guidance in navigating this evolving market for buying or selling, we encourage you to schedule an appointment with our team.
Sources:
https://www.abnamro.nl/nl/prive/hypotheken/actueel/huizenmarkt/woningmarktmonitor-januari-2024.html
https://www.nvm.nl/nieuws/2024/prijsstijging-woningmarkt-houdt-aan/
