The real estate market has not yet reached its nadir. Prices won’t stabilize until early next year at about 9 percent below last summer’s peak, predicts Menno Middeldorp, head of RaboResearch. “Then the market will get some support from the mortgage interest rate, and it won’t really go up.”
House prices fell further in May compared to April, reports Statistics Netherlands. But year-on-year, prices fell sharply, by 5.6%. An average house now costs almost 404,000 euros. With a total decline of 9%, we will be at the level of 2021 early next year, says Middeldorp. ‘This is a correction to a very large increase that came before that.’
Even the higher bids seem to be starting up again somehow, Makelaarsland noted in the Telegraaf. Although, according to Middeldorp, this could be a lagged effect of lower asking prices. An important factor in home prices is market expectations, Middeldorp says. After all, if you buy a new home, you usually have to sell your old home as well. “People don’t want to be mistaken about this discrepancy, and so price expectations also start to play a role.”
Less additions in the peak
In the end, you don’t build enough “into peak prices.” If prices then fall, new construction in particular will decrease, resulting in a reduction in construction. That means scarcity will continue to exist for the time being, Middeldorp fears. “It’s just dragging itself around. In a completely free market, price determines who gets which house. Now you intervene, but this only shifts the problem from one side to the other».
Source: BNR
Andrew Dwight is an author and economy journalist who writes for 24 News Globe. He has a deep understanding of financial markets and a passion for analyzing economic trends and news. With a talent for breaking down complex economic concepts into easily understandable terms, Andrew has become a respected voice in the field of economics journalism.
