19 July 2022, by Rutger Kanters

The first signs of a cooling housing market are on the wall, or so the figures of the Dutch Association for Real Estate Agents (NVM) tell us. Even so, it is too early to celebrate. Rutger from Waltmann Makelaars explains how the interest rate curve over the coming months will offer more clarity for people looking to buy a house.

Concern over interest ratesInterest rates have been rising since the start of the year. These increasing rates are raising some concerns amongst potential buyers, who doubt whether buying a house is what they want or should be doing right now. Meanwhile, vendor move to quickly put their houses on the market now.

This combination of trends seems to offer a bit more breathing space in the current housing market. Quarterly figures don’t tell us a lot about the current situation yet, but real estate agents have noticed a slight increase in the number of available properties.

Changing housing sectorThe increasing interest rates also directly affect the size of the mortgage people can get and, thus, also the housing sector in which the buyer may find a property they can afford. Shifting interest rates mean that the house you had set your heart on is suddenly beyond your budget and goes back onto the market.

Decline in trustThe trust people had in the housing market has further declined. Consumers are worried about their financial situation, and rising inflation, as well as increasing prices for resources and energy, have further put a hole in buyers’ spending budgets. Such extra costs affect buyers instantly.

The rising interest rates and high house prices don’t contribute positively to our trust in the housing market. Buyers stay put as their financial situation is less secure than before. In practice, this mostly leads to fewer viewings and less overbidding.

No extreme decline in housing pricesDespite some property bubbles, housing prices are not expected to fall massively in the short term. They may even still increase if interest rates remain around 3 percent. However, the situation could change drastically if rates go up to 4 or 5 percent. Still, that is a matter of conjecture.

Waltmann Makelaars know exactly what a house is worth in this changing market. Don’t hesitate to get in touch to get expert advice, increase your chances and options to secure the house you want, and not overpay. 

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