Property prices in the Netherlands are not appreciating despite favorable inflation rates, low homebuyer tax rates and an economy that faltered little due to the recession. Major Dutch real estate research firms Statistics Netherlands and the Dutch Association of Real Estate Agents differ on the outlook, but both indicate a drop in values in real terms across the region, save for a slight uptick in Amsterdam. Some attribute it to a move by the European Central Bank that resulted in an increase in average mortgage rates, but all other indicators point to growth, including one of the lowest unemployment rates in the Eurozone. For more on this continue reading the following article from Global Property Guide.
More optimistic figures have been produced by the Dutch Association of Real Estate Agents (NVM). Although they show median house prices dropping 0.6% during the year to Q2 2011 (-2.82% when adjusted for inflation), NVM believes house prices rose in the second quarter by 3.1% (2.93% in real terms).
During the year to end-Q2 2011, according to NVM:
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• In Amsterdam, house prices rose by 4.2% (1.9% in real terms)
• In The Hague, prices increased by 2.12% (-0.17% in real terms)
• In Rotterdam, house prices dropped by 3.75% (-5.9% in real terms)
• In Utrecht, prices fell by 1.9% (-4.1% in real terms)
In Q2 2011, the total number of house sales (transactions) was 30,300 units, down 8.6% from the same period last year. The number of houses for sale rose by 17.3% in the year to Q2 2011.
In July 2011, the European Central Bank (ECB) raised the benchmark rate to 1.50%, its second rate hike this year from an all-time low of 1%. This resulted in a slight increase in the average mortgage rate in the country to 4.68% in June 2011.
To boost the housing market, the government recently cut the tax that homebuyers pay when they purchase existing properties from 6% to 2%. This will apply until June 2012. Because of this, NVM expects sales to grow by more than 10% in Q3 2011 from the same quarter last year . Despite this, it still projects house prices to drop further in the second half of 2011.
After experiencing a 3.9% contraction 2009, the Dutch economy grew by 1.7% in 2010. In the year to Q1 2011, the economy expanded by 2.8%, higher than the 2.3% real GDP growth rate seen in Q4 2010 and driven by high domestic investments and increased export revenues. The economy is projected to expand by 1.9% in 2011.
In June 2011, the inflation rate in the country was stable at 2.3%, based on the latest figures released by Statistics Netherlands.
According to the Eurostat, the unemployment rate in the Netherlands was 4.2% in May 2011, one of lowest in the Eurozone.