House prices to increase in 2021
On Thursday, the 10th of December, the Rabobank announced that they expect house prices to continue to rise in 2021 despite the corona crisis. They previously predicted a price drop but are coming back on that prediction now. “Because the economic outlook has improved, housing investors are still very active and lending standards are being relaxed, we do not expect any further fall in house prices,” says the bank’s economist Ester Barendregt.
In October, ABN Amro Also returned to the previously announced expectation that house prices would fall next year as a result of the corona crisis. That bank now expects prices to stabilize in 2021. For the time being, the Dutch Central Bank expects owner-occupied houses to become cheaper.
The banks are adjusting their forecast because the economic impact of the corona crisis seems to be better than expected. The Support packages from the Dutch government in the particular played a crucial role in limiting the economic damage. Due to the fact that new construction is now lagging behind, the Rabobank economists do expect fewer houses to be sold next year. Where this year around 235.000 houses will be sold, the expected amount is 220.00 for next year and 210.000 for 2022.
Disclaimer: Please be mindful that the prediction from Rabobank was made before the announcement of the new lockdown, which started on Tuesday the 15th, 2020.
Source: Financieel Dagblad, Rabobank: house prices continue to rise, 10 October 2020.