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Confidence in Dutch housing market falling as interest rates rise

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Rising mortgage rates and rising tensions between buyers and sellers have led to an uncertain era in the Dutch housing market. Nieuwsuur Report Based on numbers and conversations from various sources in the market.

Mortgage rates have tripled in the last six months. Consumer confidence in the home market fell to 87 in June, the lowest since 2014, Vereniging Eigen Huis (VEH) of the Homeowners Association told the program. “People are becoming more and more reluctant to take out mortgages,” said Hans Andre de la Porto of VEH. “It makes sense given the economic situation.”

Rising mortgage rates have a significant impact on the cost of a new home. Nick Freeseller, a housing market economist at Rabobank, said, “If you bought a house for a net cost of € 1,000 a month six months ago, you lost a net amount of 1,200-1,250 a month due to increased interest in the same house. It will be. ” explained. “And given the significant rise in energy prices, we can imagine homebuyers rethinking before buying a home.”

Rising mortgage rates also mean that the maximum amount a buyer can borrow is decreasing. “If you earn about twice as much on average with your partner, you can borrow about € 420,000 at the beginning of the year, and now it’s only about € 375,000,” Vrieselaar said.

Buyer uncertainty strains sellers and encourages them to put their homes for sale. Bid prices are down, according to data from the housing website Funda. In May, 40% more homes were put up for sale than in May last year. Views for the same month decreased by 32%.

The cautious chill in the housing market is also reflected in the numbers by mortgage adviser De Hyphoteker. In the second quarter of this year, the average mortgage amount fell for the first time in three years. The average mortgage in the second quarter of 2022 was € 322,000, compared to € 326,000 in the same quarter last year.

“If you hear the news that the home market is chilling, you’re likely to sell your home if there are many signs of it for sale in your neighborhood,” said Rabobank’s Vrieselaar. “And if everyone does, you also get a downward self-reinforcing effect.”

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