A significant rental market outflow is evident, with 40% of homes sold in the four largest municipalities being former rental properties. The government’s Spring Budget’s announcement of a two-year freeze on social rents raised concerns among housing corporations about a potential EUR 47.4 billion capital investment shortfall, equivalent to the construction of 181,000 new homes or sustainability upgrades for 1.58 million existing homes. There is further concern regarding housing supply, with early 2025 building permit figures suggesting a widening gap with the government’s annual target of 100,000 new homes.

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Dutch housing market experiencing continued upwards pressure

House prices are continuing their upward trajectory, with a 10.9% increase YoY and 1.8% QoQ in 2025-Q1, caused by a persistently tight housing market. Transactions are up 15.8% YoY but down 14.1% QoQ, driven partly by former rental properties making up 20% of nationwide and 40% of big-city sales.

House prices are expected to continue rising in 2025, with most forecasts indicating an increase of 5% to 9%, followed by moderate growth in 2026. The ongoing mismatch between housing supply and demand remains the primary driver, alongside supportive factors such as rising incomes and decreasing mortgage rates.

New home completions are well below targets and are expected to remain so, with only 6,538 permits issued in January and February, expected to halve compared to the previous quarter.

Buy-to-let market under continued stress due to sell-offs

Regulatory pressure continues to drive rental property sell-offs. In 2024, 37,000 former rental homes were sold, causing rental listings to go down by 35.5%. This intensified competition, especially for affordable units.

Rates and spreads fluctuating

In 2025-Q1, residential mortgage rates rose by an average of 24 basis points across all fixed-rate periods, driven by steep increases in Euro swap rates. Despite uniform rate increases, spreads diverged: 5- and 10-year segments saw spreads widen by approximately 9 bps QoQ, while 20- and 30-year spreads tightened by around 10 bps. Buy-to-let mortgage rates rose by 13 bps QoQ, with spreads widening in April.

Mortgage originations down, but offer volume is up

In 2025-Q1, mortgage inscriptions fell to EUR 37 billion, a 14% QoQ decline but 37% higher YoY. However, mortgage application volumes increased by 23.4% YoY, with average mortgage amounts up 7% to EUR 371,000.

Sustainability figures in decline

Heat pump sales in the Netherlands dropped by 27% YoY in 2024 due to reduced subsidies and policy uncertainty, as part of a larger trend in Europe. Contrastingly, the UK experienced a 63% increase in heat pump sales, driven by government subsidies.

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