The housing market in the Netherlands is expected to reach a state of balance as mortgage rates increase and house prices fall. This creates affordability for prospective buyers in 2023, similar to the favourable conditions seen in 2021. However, if interest rates remain unchanged, buying houses in 2024 could become more expensive. The market experienced a prolonged period of growth from 1985 to 2008, but it came to an end in 2008, followed by a decline in housing prices. The future trajectory of prices depends on evaluating their relation to relevant economic factors.
The housing market in the Netherlands is expected to reach a state of balance soon. This is due to the combination of increasing mortgage rates and falling house prices. If mortgage rates remain unchanged, real estate prices are likely to increase again next year.
For individuals who are planning to purchase a house in the Netherlands this year, this means that homes will be relatively affordable, similar to the affordability seen in 2021 when interest rates were exceptionally low. Rabobank economist Stefan Groot also shares this view and predicts that 2023 will be the year when the Dutch housing market stabilizes. Groot stated, "Affordability is gradually improving, and we have experienced the largest decline in house prices."
However, buying houses in 2024 could potentially become more expensive if interest rates remain unchanged in the near future. Nevertheless, this increase in costs can be offset by rising wages, allowing interested buyers to offer higher bids when purchasing a house.
In the Netherlands, there was a prolonged period of continuous growth in housing prices from 1985 to 2008. Within this timeframe, between 1996 and 2001, prices even rose by an annual rate of 10 to 18%. However, this period of growth came to an end in August 2008. According to Statistics Netherlands (CBS), there was a decline of approximately 3% in housing prices between 2008 and 2009. Whether further decreases in prices can be anticipated in the near future depends on the evaluation of whether the current home prices are excessively high in relation to relevant economic factors.
In the market, a state of equilibrium refers to a situation where the supply of a product or service is equal to the demand for that product or service. It is the point at which the quantity that buyers are willing to purchase matches the quantity that sellers are willing to supply, resulting in a stable market price. At this equilibrium point, there is no inherent pressure for prices to rise or fall, and the market is considered to be in a balanced state.
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