Third Quarter sales of 29,000 match the previous three months, even though they are normally lower, due to the summer holidays, says Dutch real estate body, the NVM. Prices are due to rise 3-4% in 2014.
The Dutch residential property market is set to see sales volumes rise by one-third in 2014 and prices by 3-4% – that’s the verdict of the Dutch real estate body, the NVM.
But the market improvements are much more pronounced in cities than rural areas, with property prices rising by up to 10% in Amsterdam, Utrecht, Leiden and Haarlem.
NVM brokers sold 29,015 homes in the last quarter, close to the previous quarter’s figure of 29,101 and among the best for five years. Total market sales estimated at 39,000 homes, according to provisional data from the NVM.
NVM Chairman, Ger Hukker, says, “These are good figures, especially if you take account of the fact that performance in the third quarter is always less than in the second quarter, because of the summer holidays.”
Prices had risen throughout the last three quarters, but are now down by 0.3% compared to the previous quarter to an average of €214,000. The average price for detached homes sold was €337,000, while the figure for apartments was €168,000.
The number of sales of semi-detached properties fell by 4% and terraced houses by 1.7%, but other categories of housing saw a slight increase in the number of sales.
Prices of homes sold in the third quarter fell 0.3% compared to the second quarter of 2014 but are still 3.9% higher than a year ago and the NVM does not expect to see any further increase in prices this year.
The sales price for detached homes is now 2.2% higher than last year, and prices of terraced homes are up by 2.5%. The prices of corner houses, up 5.1% and apartments, up 5.8%, have seen the highest increase.
But the number of transactions has risen by much more in the last year and is currently up 28.9%. In the last year, NVM brokers have sold almost 109,000 (in a total market estimated at 146,000 homes). At the lowest point in the market, five quarters ago, that figure was about 25% lower at 82,000. In the pre-crisis period, in mid-2008, NVM brokers sold around 150,000 homes annually (compared to a total market of 200,000).
The NVM anticipates another good final quarter of 2014. “We expect to reach 30,000 or more NVM transactions. On an annual basis, that takes us to around 112,500 NVM transactions, or 150,000 transactions for the total market. That amounts to 40,000 more transactions or a third more than the number of sales in 2013.”
According to the NVM chairman, the short-term prospects for further continued recovery in the housing market are good. “The competitiveness of owner-occupied homes compared to rental properties has seen a further improvement.”
As in previous quarters, the recovery has been patchy. “We are primarily seeing improvements in urban areas, with rural areas trailing, sometimes far behind.”
The NVM chairman says in some popular cities, including Amsterdam, Utrecht, Leiden and Haarlem, markets are tight, prices are rising significantly, houses are selling fast and there is heavily reduced supply, but this is primarily concentrated in pre-war neighbourhoods and the terraced house and apartments segments.
“With annual price increases of between 3 and 10% and some homes selling above the asking price, it is certainly not exaggerating to talk of overheating, although even in these popular market segments, with shortage indicators (krapte-indicator) of 7 and 8 and homes taking between 60 and 100 days to sell, the market is still more expansive than it was before the crisis.”
Even in cities where there is overheating and the housing market threatens to become unbalanced, Mr Hukker sees “lots of new construction and clever redesignation of older properties as the best way of cooling the market. Targeted building of new housing can prevent prices peaking again and further shortages.
“Around the major cities, many office premises also remain unoccupied. In these areas, redesignation converting such buildings into student accommodation or sheltered homes for the elderly – can kill several birds with one stone.”
The downward trend in the number of homes available for sale is continuing. Midway through the third quarter of 2014, NVM brokers had 152,355 homes on their books. The total supply of existing properties currently on the market is estimated to be 205,000, an 8.3% drop in supply compared to a year ago.
But the supply of detached homes has fallen just 1.9%. “The most expensive housing category so far seems to have benefited the least from the recovery in the housing market,” Mr Hukker says.
Mid-way through the third quarter of 2014, the asking price for the average home available for sale was €272,000. The asking price for the average apartment is €170,000 and the figure for the average detached home is €434,000.
The homes sold during the third quarter were on the market for an average of 122 days, down from 133 days three months ago and 159 days a year ago.
The NVM currently has 3,947 members, with 3,471 active in the housing market. At the end of September 2014, there were 2,810 NVM-affiliated branches, 23 more than the previous quarter and 46 more compared to September 2013. Of these, 2,554 are active in the housing market. The other firms operate in sectors such as commercial or agricultural property.
By Adrian Bishop, Editor, OPP Connect