Amsterdam property prices 2017
Amsterdam -Expected housing market in 2017
Aril 9th, 2017 By: James Evans
The housing market is on the rise with more homes sold in 2016 and the low mortgage rates leading to rising housing prices.
Record year for housing
The housing market has been on the rise since 2014. However, these past 12 months (2016) can be considered a record year with increases to property prices in Amsterdam. With 214 793 sold properties sold within the last 12 months according to the ‘koopwoningin’, this maintains the largest number since the Central Bureau of Statistics (CBS) began.
A housing price peak was seen in December 2016, house prices rose an average of 5% of the year. Check the figures from Statistics Netherlands.
Recovery of the housing market
The recovery of the housing market is mainly driven by the low mortgage rates. Whoever buys a house can count on low monthly payments as well as the following factors:
- Renting is expensive every year and new constructions remain low.
- Buyers have more confidence in the housing market and their own finances.
- More mortgages get approved.
- Potential sellers have postponed and now and take their chances.
Forecasting the housing economy by banks in 2017
The recovery of the housing market is so fast but Rabobank expects even stronger growth in 2017. The Rabobank economists expect a rise in house prices between 5% and 7%. The number of transactions is expected to increase from 200,000 to 220,000 purchases.
ABN AMRO expected an increase of the house prices of 3%. The increase in the number of home sales will fall significantly lower according to the bank than last year.
Expected housing market in 2017
Our expectations for the housing market in 2017 will look at the factors that promote the current recovery. However, we see a downside of the rapid growth of the past year.
Buying a home remains attractive
First, what will the mortgage rate do 2017? Further fall in interest rates are not likely however the chance of a significant rise remain low. Mortgage rates will likely remain historically low, which is attractive for house buyers 2017. See mortgage rate expectations in 2017.
The economic prospects for 2017 are good. The purchasing power increase and the unemployment rate decreases, seen from the Macro Economic Outlook.
Consumer confidence is beginning 2017 increased again.
In short, the factors that led last year growth in the housing market will most likely continue to exist in 2017.
Demand for apartments continues to grow
In 2017 again rising rents on average by 2.5% and 4% for high incomer will open up new incomer revenue opportunities for smaller apartments in the free market.
Workers and expats in Amsterdam without permanent contracts, for example, contractors, flex workers and freelancers will continue to increase this year meaning the demand will continue to increase.
Supply on the housing market lags behind demand. This is beneficial for homeowners and they sell the property quickly at a higher price. Today it is not unusual for a buyer offering the asking price or even more. Housing prices in 2017 will increase further by the persistently high demand.
The number of homes for sale is not sufficient to meet the increased demand. In addition, supply and demand do not exclude each other well. Thus first time buyers who want to live in popular areas will struggle to find a home. The number of transactions in the housing market will be lower by the lack of supply in 2017.
Buy remains attractive, but beware!
A property purchase remains attractive in 2017, however, the recovery of the housing market is no certainty. The very strong growth in 2016 on the market can later cause problems:
The high demand for owner-occupied housing can cause overheating of the housing market. This may cause risk-taking buyers and cause market inflation.
The low mortgages buyers can borrow more; this can cause unnatural rise in house prices, causing a housing bubble.
The house price does not rise in every region. The Dutch housing market has major differences between shrinking regions and growth regions such as Amsterdam and Rotterdam.
It is up to the buyer to keep his cool and realistically look at their financial situation, now and in the future. A calculation of the financial resources constitutes the first step.
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