A lack of vision creates continued uncertainty in the Dutch housing market. The rapidly rising supply and falling transaction numbers show that the outlook for the Dutch housing market remains poor.
Negative outlook
In the third quarter the number of properties for sale increased to more than 207,000 (+18% year-on-year). Although the number of transactions increase by 4% compared to Q2, on an annual basis the number of residential properties sold fell by about 5%. As in the previous two quarters, there was an increase in the average selling price. However, this increase distorts the picture, since proportionately a larger number of more expensive homes were sold. The price index published by Dutch Statistics (CBS), which corrects for the quality of homes sold, shows that selling prices have fallen by over 9% since their peak in August 2008. Average selling prices are expected to fall nationally by over 2% in 2011 as a whole, and are expected to fall again by 2.5% in 2012. The outlook for the Dutch housing market remains poor.
Uncertainty
The main reason for the negative outlook on the Dutch housing market is consumer uncertainty. There is a lack of clarity about the future of mortgage interest tax relief, maintenance of the National Mortgage Guarantee limit and the lowering of transfer tax. In addition, events in Europe are not conductive to consumer confidence. The lack of vision and the associated uncertainty ensure that developments are being postponed. Nevertheless, the growing number of households – 800,000 up to 2025 – will have to be accommodated by the housing market. Although population growth will be concentrated mainly in the Randstad conurbation of the Western Netherlands, the growth in the number of households is spread more evenly throughout the country. This is because the population outside the Randstad conurbation is ageing faster in relative terms.
Rental market
As of 1 October, landlords in ten regions with a shortage of homes on their residential property are permitted to raise the rent by a maximum of €123. The rules only apply to new rental agreements and only in the regulated rental sector (up to €653 a month). One outcome is that rents for homes that were previously just below the deregulation limit can now be deregulated. An adverse effect for tenants is that the rent allowance will be lowered by an average of €111 a year.