House prices up 6.9% y-o-y in Q3 2020

The Netherlands’ house prices continue to rise strongly, buoyed by record low interest rates, with supply unable to keep up with strong demand. The average purchase price of all dwellings rose by 6.9% during the year to Q3 2020, the strongest growth since Q3 2018. On a quarterly basis, house prices increased 1.51% during the latest quarter.

 

Home sales are rising amidst supply shortages

In the first ten months of 2020, the number of dwellings sold rose by 7.4% to 190,854 units from the same period last year, following zero growth in 2019, according to Statistics Netherlands (CBS). 

During 2019, there were almost 71,000 completions, over 6% up from the previous year and the highest level in a decade. Yet it remains inadequate to meet surging demand. The housing shortage in the Netherlands was estimated at about 200,000 units this year.

Rents, rental yields: attractive yields for a developed economy at 3.7% to 6.4%

Amsterdam apartment costs are around €6,900 per sq. m.

Netherlands: typical city centre apartment buying price, monthly rent (120 sq. m)
	Buying price	Rate per month	Yield
Amsterdam	€ 828,240	€ 2,569	3.72%
The Hague	€ 438,360	€ 2,050	5.61%

Recent news: In Q3 2020, the Dutch economy partly recovered with real GDP rising by 7.7% from the previous quarter, after two consecutive quarters of GDP declines of 8.5% in Q2 and 1.5% in Q1 due to the pandemic, according to the CBS. Household spending surged 9.4% q-o-q in Q3; public consumption increased 6.3%; investments were also up by 6.3%; exports and imports increased 8.6% and 6.8%, respectively. On an annual basis, the economy shrunk by 2.5% in Q3 2020, following declines of 9.4% in Q2 and 0.2% in Q1.

Recently, the European Commission revised upwards its 2020 economic forecast for Netherlands to -5.3%, from its earlier estimate of -6.8%. The Dutch economy expanded by 1.8% in 2019, 2.6% in 2018, and 2.9% in 2017.