House price development in the Dutch mortgage market


House price development in the Dutch mortgage market

Property prices in the Netherlands have increased in the past 9 years. This increase in property prices can mostly be attributed to a tight property market, increased interest from buy-to-let investors, fiscal stimulus and declining mortgage rates.

Since H2 2022, the house prices are under pressure because of sharply rising mortgage rates, less fiscal stimulus, less demand from buy-to-let investors and worsening buyer sentiment. However, the property market is still supported by a strong labor market, rising wages, and a structural shortage of new build properties - and by higher building prices, caused by inflation. Taking all these balancing effects into account, we expect house prices to decline by around 10% from the peak of 2022 into 2023. In the longer run we expect the housing shortage in the Netherlands to support house prices and that the current sentiment and interest rate changes will mostly be a shorter-term effect.

At the same time, we expect credit losses on our Dutch mortgage portfolios to remain very limited in the foreseeable future. Unemployment rate is still close to record lows and the growth of the Dutch economy appears resilient with 1.6% expected growth in 2023 according to CPB Netherlands Bureau for Economic Policy Analysis. Also, the Debt-Service-To-Income (DSTI) is conservatively low. And most borrowers have opted for long-term fixed-rate mortgages, making them less vulnerable to rising mortgage rates. Therefore, we believe that the probability of default on Dutch mortgages is still limited. Moreover, most borrowers have built up significant equity cushions in their properties, as the house prices increased significantly over the past decade, and additionally borrowers have partially paid off their (repayment) mortgage. This means that the Loan-to-values (LTVs) are generally low, and we therefore expect credit losses to be low as well on defaulting borrowers / mortgages.

This analysis gives an overview of the recent development of the housing market in the Netherlands. It explains part of the house price growth observed since 2013 and provides an estimate of the house price growth of the coming years. Download the analysis below. 

Important Disclosures

Dutch Housing Market Outlook March 2023.pdf

(381KB) PDF


More about the authors

Stijn Stortelder Portfolio Manager European ABS & Mortgages

Rens Ramaekers Portfolio Manager European ABS & Mortgages

Philip van der Meijden Portfolio Manager European ABS & Mortgages


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