Our latest report on the Dutch Housing Market reveals ongoing increases in house prices and property transactions amid ongoing economic challenges. In Q4 2024, house prices surged by 11.5% year-on-year and 2.1% quarter-on-quarter, continuing an upward trend that illustrates a dynamic housing market.

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House prices & transactions up, further growth expected

Roughly 60,000 property transactions were recorded during the quarter, marking an 18.6% increase year-on-year and a 10.7% rise quarter-on-quarter. This significant increase reflects strong market activity and sustained demand, largely driven by unexpected wage growths and declining mortgage rates.

Financial institutions anticipate further growth in house prices, with forecasts averaging a 7.64% increase for 2025 and 4.33% for 2026. However, while the market outlook remains positive, affordability concerns could temper future price rises.

The report also highlights a persistent housing shortage, despite an 11.9% rise in finished properties during Q4. Total new home completions for 2024 dropped by 6.31% year-on-year to 68,995 units, falling short of the 100,000 annual target. An increase in issued permits by 13.6% year-on-year offers potential for future supply growth.

Buy-to-let market in flux: investor properties exchanging hands with first-time buyers

The buy-to-let sector experienced a notable surge in investor property sales, increasing by 57% year-on-year in Q3 2024, influenced by the Affordable Rent Act. This has led to a 20.2% reduction in mid-market rental property supply, intensifying competition among tenants.

Many properties that would have fallen under the regulated mid-market rental segment are instead being sold rather than staying on the market at lower rental prices. First-time buyers, especially in the 4 biggest cities of the Netherlands, are profiting from this inflow of more affordable properties, causing the share of first-time homebuyers to skyrocket to almost half of all transactions, versus less than 40% in Q4 2022.

Mortgage rates declining

Mortgage interest rates saw a modest decline of 10 basis points quarter-on-quarter in Q4, tightening mortgage spreads. This, combined with a 29% rebound in mortgage originations to EUR 139 billion for 2024, highlights a strong recovery in the mortgage market.

Sustainability remains an important consideration for consumers

In 2024, a total of 14.9% of mortgage applications included financing for energy-saving measures, up slightly from 14.1% in 2023.

As a result of the newly introduced lending standards, that allow borrowers to borrow more for energy-saving measures based on the energy label, applications that included an energy label surged from 58.6% in 2023 to 90.7% in 2024.

Consumer confidence deteriorating amidst economic uncertainty

Amidst the recovery of the mortgage market, consumer confidence has deteriorated, dropping to -28 in January 2025. This decline marks the fourth consecutive month of negative sentiment, driven by broader economic concerns including rising inflation, which hit 4.1% year-over-year in December 2024.

The European Central Bank's decision to lower policy rates by 25 basis points in January 2025, for the fifth consecutive adjustment, underscores the economic uncertainties facing the region. Nonetheless, unemployment remains stable at 3.7%, providing some stability amid fluctuating economic conditions.

Disclaimer

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.