<p><strong>The Dutch housing market closed 2025 with high transaction volumes, sustained mortgage demand and resilient household finances. At the same time, structural imbalances remain unresolved. While buyer activity intensified and prices continued to rise, housing supply lagged well behind policy ambitions and affordability pressures persisted, particularly for first-time buyers and renters. With coalition negotiations still ongoing after last year’s political instability, the outlook for housing supply hinges on whether shared policy ambitions can translate into concrete action.</strong></p>

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<h2>House prices continue to rise as transactions accelerate</h2>

<p>Dutch house prices increased by 6.2% YoY and 0.5% QoQ in 2025-Q4. Approximately 67,000 homes were sold during the quarter, up 12.2% YoY and 7.4% QoQ, bringing total transactions for the full year to nearly 239,000 (+15.6% YoY). Regional differences remained visible: price growth was strongest in Drenthe (+8.4% YoY), while Noord-Holland (+3.9%) and Amsterdam (+1.6%) showed more modest gains. Despite slower price growth in the major cities, transaction volumes there continued to rise, reflecting tight supply and strong underlying demand.</p>

<h2>Mortgage activity further increased</h2>

<p>Mortgage origination volumes remained strong toward year-end. Total mortgage inscriptions reached EUR 50 billion in 2025-Q4, up 11% QoQ and 16% YoY, lifting the full-year total to a record EUR 173 billion. Mortgage applications rose to over 563,000 in 2025, driven by both home purchases and refinancing. The average purchase mortgage increased to EUR 373,000, while the average home value climbed to EUR 512,000, underlining ongoing affordability pressures – especially for first-time buyers, whose loan-to-income ratios continued to rise.</p>

<h2>Housing supply remains below target</h2>

<p>Housing supply continued to fall short of government objectives. Around 79,000 building permits were issued in 2025 (through November), slightly below 2024 levels and far from what would be required to meet the long-standing target of 100,000 new homes per year. New construction completions totaled roughly 60,000 homes, implying a shortfall of around 40%. Longer construction times, regulatory bottlenecks and limited coordination between authorities continue to constrain the pace of supply growth.</p>

<h2>Investor divestment reshapes the market</h2>

<p>Investor sell-offs remained a defining feature of the housing market. Private and institutional investors continued to reduce their housing holdings, particularly in urban areas. Homes sold by investors were, on average, cheaper than those sold by owner-occupiers, benefiting first-time buyers and boosting transaction volumes. At the same time, the contraction of the rental stock (especially in the mid-market segment) continued to put upward pressure on rents.</p>

<h2>Rents rise as availability tightens further</h2>

<p>The private rental sector rental market remained structurally tight in 2025-Q4. Average rents increased to EUR 1,838 per month, up 6.5% YoY, while supply declined as more homes were withdrawn from the market than newly listed. Price pressure was most pronounced in medium-sized cities and regions outside the Randstad, though major cities such as Amsterdam and Rotterdam remained the most expensive markets. The imbalance between demand and supply remains most acute in the EUR 1,500 - 2,000 segment.</p>

<h2>Interest rates stabilize, spreads tighten</h2>

<p>Mortgage interest rates rose modestly during 2025-Q4 due to higher swap rates, but showed signs of stabilization after year-end. Mortgage spreads tightened further across most segments, reflecting competitive market conditions and easing funding pressures. Buy-to-let mortgage rates edged slightly higher, while spreads declined, partially offsetting the impact of higher base rates.</p>

<h2>Increased attention on interest-only mortgages</h2>

<p>Interest-only mortgages have continued receiving renewed attention from regulators due to concerns around borrower vulnerability and systemic risk, particularly where high loan-to-value ratios coincide with limited repayment buffers. While these loans typically carry a modest pricing premium that has increased since mid-2025, they remain appropriate for many households with low LTV, stable incomes and robust pensions. From our perspective, any sector-wide policy measures should remain proportionate, as overly restrictive approaches risk limiting housing market mobility, especially among older homeowners.</p>

<h2>Outlook: growth continues, but constraints remain</h2>

<p>Looking ahead, Dutch banks expect house prices to continue rising in 2026, albeit at a more moderate pace, supported by wage growth, stable employment and persistent supply shortages. Transaction volumes are expected to ease slightly from 2025’s elevated levels as the pool of available homes remains limited. The direction of housing policy, and the speed at which supply constraints can be addressed, will be decisive in determining whether the market’s structural imbalance can finally be reduced.</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>