<p><strong>The Dutch housing market continued its upward trajectory in 2026-Q1, with house prices rising 5.2% YoY and mortgage application volumes reaching a new quarterly high. The period was marked by a sharp mid-quarter surge in mortgage demand as consumers moved to front-run rate increases triggered by geopolitical tensions in the Middle East. Against this backdrop, structural supply shortages persist, and housing policy is beginning to take shape under the newly sworn-in Jetten cabinet.</strong></p>

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<h2>House prices rise further as transactions recover YoY</h2>

<p>The Dutch House Price Index stood at 153.6 in 2026-Q1, up 5.2% YoY and 1.0% QoQ – a slight moderation from 6.2% YoY in 2025-Q4, partly reflecting ongoing buy-to-let to owner-occupied conversions. Transaction volumes reached approximately 56,000, down 16.8% QoQ on seasonal patterns but up 8.7% YoY. Regionally, Drenthe led with +8.2% YoY price growth, while Amsterdam lagged at +1.9% YoY and flat QoQ.</p>

<h2>Housing policy takes shape under Jetten cabinet</h2>

<p>The Jetten minority cabinet, sworn in on 23 February, placed housing first in its coalition agreement. Key measures include addressing nitrogen constraints, reducing transfer tax on non-owner-occupied homes to 7% from January 2027 and preserving the mortgage interest deduction. A policy letter sent to parliament on 24 April added EUR 287 million in funding for accelerated delivery, simplified permitting, a 50% prefabrication target and an expansion of priority housing areas from 21 to 30.</p>

<h2>Mortgage applications surge mid-quarter on rate hike fears</h2>

<p>A total of 147,000 mortgage applications were submitted in 2026-Q1 (+3.3% YoY), with purchase-related applications rising 1.1% and refinancing up 6.4%. The average purchase mortgage reached EUR 373,000, against an average home value of EUR 517,000. Volumes were subdued through week 10 before surging sharply as Middle East tensions drove rates higher and consumers moved to front-run further increases.</p>

<h2>Mortgage rates rise sharply, spreads remain relatively tight</h2>

<p>Mortgage rates rose 14 bps QoQ and 18 bps YoY on average in 2026-Q1, driven by higher Euro swap rates amid Middle East geopolitical unrest. Shorter tenors were most affected, with 5- and 10-year rates up 23 bps QoQ versus just 5 bps for 20- and 30-year segments. Spreads tightened slightly by 4 bps QoQ and stood 25 bps below year-earlier levels, before widening by around 10 bps in April as swap rates began to ease.</p>

<h2>Housing supply improves modestly, but structural shortfall remains</h2>

<p>Around 14,000 building permits were issued in January and February 2026, approximately 20% more than a year earlier. Nevertheless, 2025 completions totaled around 70,000 units – well below the government's 100,000 target. Construction times continue to lengthen, with a typical new dwelling now taking almost two years to deliver, up from one and a half years in 2015.</p>

<h2>Interest-only mortgages receive renewed attention</h2>

<p>The interest-only markup over annuity rates has trended upward since mid-2025, reaching around 25 bps on average for 10-year products, with the major banks applying approximately 31 bps. In our view, sector-wide restrictions should remain proportionate: for many homeowners with low LTV, stable incomes and robust pensions, a partially interest-only structure can be appropriate. Overly stringent limits would risk locking elderly homeowners into their existing homes and mortgages.</p>

<h2>Rental market tightens further as investor retreat persists</h2>

<p>The unregulated rental market remained structurally tight in 2026-Q1, with average rents rising 7.3% YoY and new tenants paying an average of EUR 1,892 per month. Noord-Holland remained the most expensive province at EUR 25.79 per square meter, while Rotterdam and Eindhoven posted the strongest city-level growth at around 10% YoY. Investor divestment continued to shape the market: on 1 January 2026, investors owned around 9% of the national housing stock, down from 9.4% two years earlier, with one in six homes sold in 2025 having been a former rental property.</p>

<h2>Outlook: prices expected to rise further, transactions to moderate</h2>

<p>Dutch financial institutions continue to maintain their forecasts on house price growth for the coming years, supported by rising wages and persistent supply shortages, though increased economic uncertainty due to the war in the Middle East is also factored in. Price growth is expected in the range of 3% to 3.1% in 2026 and 4% to 4.1% in 2027. Transaction volumes are expected to decline modestly, as owner-occupiers remain reluctant to sell below asking price and buy-to-let conversions are expected to slow around summer 2026. Consumer confidence fell sharply to -30 in March, its largest monthly drop in nearly four years, underscoring the fragile demand backdrop.</p>

<p><strong>Disclaimer</strong></p>

<p>Dynamic Credit Partners Europe B.V. (‘Dynamic Credit’) is a registered investment company (beleggingsondernemingsvergunning) and a registered financial service provider (financiëel dienstverlener) with the Dutch Authority for the Financial Markets (Autoriteit Financiële Markten). This presentation is intended for informational purposes only and is subject to change without any notice.The information provided is purely of an indicative nature and is not intended as an offer, investment advice, solicitation or recommendation for the purchase or sale of any security or financial instrument. Dynamic Credit may in the future issue, other communications that are inconsistent with, and reach different conclusions from, the information presented herein. Dynamic Credit cannot be held liable for the content of this presentation or any decision made by a third party on the basis of this presentation. Potential investors are advised to consult their independent investment and tax adviser before making an investment decision. An investment involves risks. The value of securities may fluctuate. Past returns are no guarantee for future returns.</p>