Owner-occupied homes were cheaper in February for the first time in nine years than in the same month a year earlier.
This year-on-year price decrease is evident from data from the Central Bureau of Statistics and the Land Registry. Last month, houses were 0.8 percent cheaper than in February 2022, the average sales price in February was 410,189 euros.
Real estate agents’ association NVM also noted the first price drops in the third quarter of last year. However, there is a difference between the figures from Statistics Netherlands and NVM. The brokers’ association looks at the prices in the purchase agreements and only has an overview of 70 percent of the sales, the CBS looks at all transaction prices that ultimately reach the Land Registry via the civil-law notary, often three months after signing the purchase agreement.
Up since 2013
Prices of existing owner-occupied homes reached an all-time low in June 2013. It then went up in an almost straight line for nine years until August 2022, but prices of existing homes have been falling ever since. But the decline pales into insignificance compared to the price rises of the past decade. Compared to the dip in June 2013, prices of existing homes were more than 90 percent higher in February.
But the price drops are not over yet. Economists from major banks predict that prices will fall further this year and that the housing market will only stabilize again next year.
Higher interest
One of the causes is the rise in mortgage interest rates. Last year, the interest rate tripled and now hovers around 5 percent. As a result, affordability came under pressure. The sky-high inflation and the energy crisis mean that people are more cautious about the housing market.
Read also: Wait a bit before buying a house now that prices are falling, or not?
The increased interest is also reflected in the number of sales. The Land Registry processed 11,858 housing transactions in February, which is 15.5 percent less than last year. Houses with a bad energy label in particular are sold less easily.
The time of outbidding heavily in the hope of getting a house is over; there is again room to negotiate about the selling price at many houses. Makelaarsvereniging NVM announced on Tuesday that an Open House Day will be held again on April 1. Last fall, that buyer’s day was used again after years to give the slumping sales a boost.
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