Home prices in the Netherlands will drop by 8 percent by 2025, falling 5 percent this year and 3 percent in 2024, ABN Amro said in its latest housing market monitor. The commercial real estate market is also in trouble, with investors being increasingly reluctant to invest, NVM Business said.
According to ABN Amro, the housing market is under pressure nationwide as home prices fall and the sentiment turns increasingly negative. Home prices in July were 6 percent lower than in July 2022, when they peaked. Though the decreases mainly affected homes in large cities and older homes with a low energy label. “The valuations of homes with a favorable energy label have risen,” the bank said.
Despite the price decreases, homes in the Netherlands are still largely unaffordable. “A further correction is needed,” the bank said. ABN Amro expects a very gradual improvement in affordability in the coming years, but it will be an indirect improvement caused by wage increases, not a correction in the market. “Because this takes time, the number of transactions will probably remain low.” The bank expects home sales to drop 5 percent this year and 2.5 percent next.
According to NVM Business, the commercial branch of the realtors’ association, commercial real estate is also struggling. There is a high demand for quality and sustainable office space in prime locations. Due to the increased popularity of hybrid working, the demand is particularly high for small-scale offices. But the available supply does not match that. So many businesses are postponing their relocations, Irene Flotman of NVM Business told the Telegraaf.
