After a year when housing prices skyrocketed, the housing market in 2022 seems to be cooling down. What’s happening exactly in the Dutch housing market of 2022 and what are the forecasts?
According to Statistics Netherlands (CBS) figures, the pace of the increase in Dutch housing prices is slowing down.
Did you read it too? Property prices in the Netherlands in the first quarter of 2022 are slightly lower than last year*. Surprising? Yes, especially when we have been reading reports of skyrocketing growth for years 🚀.
This blog post will provide you with the latest information on the Netherlands housing market 2022 and help you answer the most important question: “Why still invest in real estate in those volatile times?”
🕵️ Situation on the housing market in the Netherlands
The property market in the Netherlands seems to be cooling down in 2022. When a hot housing market cools down a bit, it doesn’t mean home prices are plummeting (or even going down). It just means they’re growing at a slower rate. If we take a look at the numbers, the drop is relatively small at 2.1%, and if you compare it with a year earlier, prices are still 13.7% higher.
So what could be the explanation:
- Very strong end of 2021: Prices have had a very strong increase at the end of last year, so a small decline in the following quarter is not surprising.
- Less busy: It is not uncommon for prices to fall somewhat in the first quarter, as the housing market is traditionally less crowded.
- Rising mortgage rates: Mortgage rates have risen from 1.5% to 2.5% which is still historically low, but of course it has an impact on how much money buyers can borrow and so it takes some heat out of the market.
🔮 What does the future hold?
Nobody can predict the future, duh 😏! This said, most real estate experts such as NVM and ABN Amro** continue to predict that house prices will rise because the demand for houses is still much greater than the supply. This gap is long-term and structural, and will probably not be closed any time soon, but the rise in mortgage interest rates may make growth a little bit more modest. The latter is a good thing: better to have sustainable growth than overheated growth.
ABN Amro predicts a 12.5% increase for 2022 and a 5% increase for 2023.
🎢 Why still invest in real estate in those volatile times:
In today’s uncertain times with high inflation, falling stock markets and 0% interest on your savings account, it is hard to find the right spot for your money. Real estate has historically proven to be a great alternative in such periods.
- Stable rental income: Real estate offers you a stable source of passive income through rent. Even if property prices go down for a period, you continue to earn quarterly from your investment.
- Inflation-hedge: If there is inflation, the rent will follow suit and so will your rental income.
- Property appreciation is very strong in the long run: If we look at house prices in Amsterdam between 1995 and 2020, they rose by an average of 7.1% per year over the entire period, including two lesser periods of depreciation in 2002-2004 and 2008-2013. So, as Warren Buffett always says: "Invest for the long term!"
To sum up
In summary, the Dutch housing market stays tight, and house prices are expected to keep rising. But after years of crazy home price growth, in 2022 the housing market is calming down.
With Brxs, we make it very easy to invest in specific real estate starting at €100 and you earn interest through rental income (paid quarterly) and potential appreciation in the longer term 💰.
🏡 Interested to have a try?
- Plan a chat with our team if you still have any questions.