Rabobank economists revised their earlier forecast, as prices have risen faster since the previous estimate. The Dutch economy is also recovering faster than expected from the corona crisis and the outlook for unemployment has improved in recent months.
In addition, the bank believes that capital market interest rates, which affect mortgage rates, will remain low for longer.
90,000 euros more expensive
Rabobank expects houses to become 14.4 percent more expensive this year. They also foresee a significant increase in 2022, by 11.5%. In June, Rabobank still maintained average growth of 11 and 4.6 percent respectively.
The new expectation means that an average house bought in two years will become 28 percent more expensive. That equates to an amount of 90,000 euros. “This is a gloomy message for starters,” says Rabobank housing market economist Stefan Groot.
Monthly charges higher
Even at the current low interest rates, this price increase translates into around 300 euros higher monthly payments, if the buyer pays off the mortgage in 30 years. “For example, being able to buy a house at a slightly later time affects the financial space that households have for decades,” says Groot.
In an explanation to RTL Z, Groot calculates that this concerns interest payments on the higher amount and the extra repayment costs. “It may seem that we did our best to make a provocative press release, but it is the harsh reality. A buyer who buys a home in 2022 is a lot worse off than someone who bought a home in 2020.”
According to the economists, regional differences in price developments are large. Rabobank expects the value of a home in Flevoland to increase the most this year and next.
They are counting on an average increase of 20 percent this year and 15 percent in 2022. The increase is expected to increase least rapidly in the Amsterdam region, because prices have already risen sharply there.
Experts have been warning for some time that many more houses need to be built to tackle the housing shortage. “For the time being, new construction is lagging behind the numbers needed to make up for the housing shortage,” says Groot.
“To be able to build 100,000 homes per year, the production per employee in the construction sector will have to increase considerably. This requires more use of labour-saving techniques, such as prefab construction.”