Dynamic Credit Dutch Residential Mortgage Market Report Q4 2018
Several indicators for the Dutch housing market became less positive during the last quarter of 2018 but there were also positive developments as analysis by the Dutch National Bank showed that more people are getting permanent contracts and that wage growth is expected to pick up in the coming years.
Dutch house prices have increased significantly over the past several years. Furthermore, the price divergence between the large cities in the Randstad and the rest of the country has been increasing as especially Amsterdam has seen a large influx of foreigners. Amsterdam’s population has grown overall, but it is interesting to note that there are more people leaving for other Dutch municipalities than there are arriving as people have started to look for alternatives outside the large cities.
Net migration in 2012 and 2017 between Amsterdam and other municipalities in the Netherlands:
A high proportion of people have left the main cities within 4 years of having their first child. Furthermore, the steep price increases in recent years have meant that fewer mortgages are underwater, thus enabling people to move.Jasper Koops
With regard to the mortgage interest rates: across all major risk classes and all major fixed rate periods, the top six most competitive rates have increased from the end of 2018-Q3 to the end of 2018-Q4 by 4 basis pointss on average. The relatively popular 100% loan-to-value (LTV) classes generally had smaller increases than other LTV classes meaning that the spread pick-up for high LTV versus low LTV continued to decrease. For the 30- and 20-year fixed rate periods, the difference between 100% and 80% LTV rates tightened 5 and 8 basis points s respectively. This could be the result of the several new lenders that have entered the market in recent years with a focus on the long fixed rate period, high LTV segments.
For a more elaborate update on the Dutch housing and mortgage market, see the Dynamic Credit Dutch Residential Mortgage Market 2018-Q4 Quarterly Update. If you would like to receive our housing and mortgage market update in your mailbox on a quarterly basis, please send an email to email@example.com.
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