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Growth in the Dutch housing market to continue in 2015

Dutch Housing Market Quarterly

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  • The market rallied strongly at the end of 2014
  • Between 150,000 and 170,000 homes are expected to change ownership in 2015, following 153,000 transactions in 2014
  • House prices expected to rise by an average of between 1 and 3% compared to 2014
  • Positive factors are the improved economic situation, falling mortgage rates, rising sales of new homes and good affordability
  • These are expected to be stronger than restraining factors such as the residual debt problem, scaling back stimulus measures and credit restrictions


Growth in house sales and house prices to continue in 2015

We anticipate a growth in the owner-occupier housing market in 2015. The positive factors such as a further economic recovery, high consumer confidence, falling mortgage interest rates and the substantial number of new homes sold will be strong enough to compensate for the negative factors, such as ending or scaling back stimulus measures, the negative equity problem and credit-restricting measures. We anticipate a rise in the number of sales in 2015 to between 150,000 and 170,000, following 153,000 sales last year. The average house price index is expected to rise in 2015 by between 1 and 3% compared to a rise of 0.9% in 2014.

Economic recovery positive for the housing market

For 2015, we anticipate a rise in Dutch GDP volume of 1½% compared to 2014, perhaps even a little higher, largely thanks to exports and investments. For the first time in many years, consumer expenditure among households has made a positive contribution to the growth in GDP. Thanks to rising employment, unemployment will fall slightly this year to an average of 6¼%, and disposable household income will rise. This increase and the general economic recovery in general are all positive factors for the housing market.

End-of-year rally in the last quarter of 2014

The recovery on the housing market gathered pace during the fourth quarter of 2014. The number of sales rose sharply from quarter to quarter: adjusted for seasonable effects this was more than 20% compared to the third quarter of 2014. One of the underlying reasons was that households wanted to take last-minute advantage of the temporary relaxation of exemptions from gift tax. The seasonally adjusted house price index rose during the third quarter of 2014 by 0.4%. Detached homes, however, were still falling in price; there is still an ample supply of properties for sale in this segment.

Mortgage interest rate falls to new low

Total mortgage debt fell slightly as expected in 2014. Extra repayments compensated for a rise in new mortgage approvals. Mortgage interest rates have fallen since mid-2011 to historically low levels. We expect average mortgage interest rates to be lower in 2015 than in 2014, partly because of quantitative easing by the European Central Bank (ECB).

Chapter 1: Economic background

In 2014, real GDP in the Netherlands grew by an estimated ¾% compared to the previous year, largely thanks to exports (table 1). In 2015, consumer expenditure will finally make a positive contribution again and economic growth will accelerate to 1½%. Unemployment is expected to fall slightly this year to an average of 6¼%.

Table 1: Key Data, The Netherlands
Table 1: Key Data, The NetherlandsSource: CBS, Rabobank

At the time of writing this Dutch Housing Market Quarterly we are still pondering the effects of the sharp fall in oil prices and the rapid decline in value of the euro during the past few months. Inflation will therefore be lower in 2015 than the ¾% anticipated in Table 1, and is likely even to turn into deflation. This will cause actual disposable household income to rise faster this year than previously expected, and with it private consumption. The fall in the value of the euro will give an extra boost to the growth in exports. Rising demand for goods and services, coupled with lower production costs for businesses that use oil as a raw material, will also potentially lead to higher growth in business investments. In our forthcoming Economic Quarterly, which will be published on 12 March, we will explain any adjustments in our economic forecasts and also look further ahead to 2016.

An extra boost for exports

The growth in export volumes last year was 4¼%, making this the main driving force behind economic growth. This year Dutch exporters will benefit from accelerating economic growth in the eurozone and strong growth in the United States and the United Kingdom. Exports will also be given an extra boost thanks to the falling value of the euro against the US dollar and the British pound, which has gathered pace somewhat faster during recent months than we had anticipated. Although the outlook for exports is favourable, there are still uncertainties looming in the form of the conflict in Ukraine and Russia, tensions in the Middle East and renewed disquiet about Greece.

Consumption showing cautious recovery

Consumer confidence improved during the first half of last year, but fell back somewhat in the second half due to the Ukraine/Russia crisis, the currency crisis in Russia and substantial fluctuations on the stock markets which this partly caused (Figure 1). The sub-indicator measuring willingness to buy remained virtually stable, despite the international tensions and unrest on the financial markets. This sub-indicator says most about consumer confidence among households. A separate confidence index for the housing market, the Eigen Huis Market indicator, reached 103 in January this year, almost twenty points higher than last year.

Although total private consumption last year remained the same as a year earlier, consumption of durables did rise in 2014, partly in response to a faster recovery in the number of house sales in 2013. We expect to see a further rise in house sale numbers this year (see Chapter 2), and so anticipate continuing growth in the consumption of durables during the coming quarters[1]. Real disposable household income will rise this year for the second year in a row, thanks to the recovering labour market and slower inflation caused by falling oil prices and lower energy prices. Quite a number of households are still focusing on paying off their debts or building up capital, and so we do not expect that they will spend all their extra income on consumer goods.

Unemployment to fall slightly this year

Following a fall in the first half of 2014, unemployment during the last four months of the year did stabilize somewhat (Figure 2). The reason why unemployment has not continued to fall is because while employment opportunities are improving, the number of people in the labour market looking for work has also risen. This growth in vacancies is a favourable trend as it points to rising confidence among more people that they will find a job and therefore actively look for work on the labour market. We expect that the the labour force will continue to rise this year thanks to the economic recovery and a further growth in employment opportunities. Unemployment is expected to continue its cautious downward trend.

Figure 1: Consumer confidence fluctuating strongly but general trend is slightly downwards
Figure 1: Consumer confidence fluctuating strongly but general trend is slightly downwardsSource: CBS
Figure 2: Growth in employment in 2014
Figure 2: Growth in employment in 2014Source: CBS

Theo Smid and Tim Legierse

Chapter 2: Market for existing owner-occupied houses

In 2014, 153,511 homes changed ownership, a rise of more than 40% compared to 2013. This was the highest number of house sales in a single year since 2008. After many years of falling prices, house prices began to rise again, by an average of 0.9% compared to 2013. The housing market in 2014 was clearly on the road to recovery from its lowest point in 2013 (Figure 3). We expect a further rise in the number of transactions in 2015, despite a scaling back of stimulus measures. We also expect that, with fewer homes for sale and historically low mortgage interest rates, there will be a modest rise in house prices.

Figure 3: Sales rising strongly, prices less so
Figure 3: Sales rising strongly, prices less soSource: CBS, Land Register, computation Rabobank

2.1 Transactions

Strong sprint at end of last year
In 2014 more than 153,000 owner-occupied homes were sold, more than 51,000 of which were recorded in the fourth quarter. Adjusted to take account of seasonal effects, growth in the final quarter was more than 20% compared to the third quarter. We had expected a strong last quarter of the year, as buyers were still able to benefit from the relaxation of the gift tax exemption and less stringent LTV and Nibud standards until 31 December 2014 (see Chapter 3). What we had not anticipated, however, was that in December the highest number of transactions ever in a single month would be recorded (Figure 4), higher even than the peak in 2005. This final sprint indicated that households had brought forward their purchase plans which would otherwise not have been finalized and the contracts of sale signed until January or February this year. We had also observed such a trend back in 2012, at that time prompted by an adjustment to mortgage interest relief for new mortgages with effect from 1 January 2013. We therefore expect the number of transactions to fall sharply during the first quarter of 2015.

Figure 4: Best December ever
Figure 4: Best December everSource: Land Registry, computation Rabobank

Rise in number of transactions also seen in the most expensive segment
This rise in the number of sales does however vary considerably between the various types of houses. During the crisis, homes for first-time buyers became ever more affordable as house prices and mortgage interest rates fell. On the other hand, some of those households moving up the property ladder found themselves caught in negative equity (a higher mortgage debt than the value of the house), which made it more difficult for them to move. The result was that the share of first-time buyers among house sales increased, and with it the market share of apartments (Table 2[2]), the type of home that first-time buyers mainly buy. The recovery that has been underway since mid-2013 was therefore largely generated by the cheaper segment. The market share of terraced homes (houses that wealthier first-time buyers and those moving up the property latter usually buy) and semi-detached houses are still below the level it was before the crisis, partly due to problems of negative equity. However, the increased market share of detached homes underlines the fact that the recovery now extends across most sectors. As the recovery gathers pace, we can expect the market share of terraced and semi-detached houses to grow too.

Table 2: Market share by house type
Table 2: Market share by house typeSource: Land Registry, computation Rabobank

More sales of houses that have been on the market for a longer period
The average selling time did not fall in the fourth quarter, despite the relatively strong rise in the number of transactions. At 124 days, the length of time a property remained on the market remained roughly the same as that of the third quarter of 2014 (Figure 6). This is partly because a larger market share was taken up by houses in the more luxury segment, which tend to take longer to sell (NVM, 2015). The NVM figures also show a relatively higher number of properties being sold that had been on the market for a longer period (more than one year).

Thanks to better sales of these houses, the period of time that the average house remained on the market fell from 395 to 371 days in the last quarter of 2014.[3] When the market was at its lowest point in 2013, this was even 439 days. The dichotomy in the market has still not been eliminated, however: more than 19% of the houses on the market have been for sale for more than three years (Figure 7). Loss aversion may be why these households are holding out for excessively high asking prices (Van Dijk, 2013). On the other hand, they may not be in a position to drop their prices even further, as any residual debt they would need to finance when moving house would lead to excessively high monthly costs.

Figure 5: Selling times not shortening in 2014Q4
Figure 5: Selling times not shortening in 2014K4Source: NVM
Figure 6: Still a divide in duration of supply
Figure 6: Still a divide in duration of supplySource: NVM

The market for owner-occupied homes is gradually becoming tighter
As the number of sales rises, so too is the supply of owner-occupied homes changing. If all other factors remain constant, a rise in the number of transactions produces a fall in supply. On this basis, a sharp fall in supply during the last quarter of 2014 was to be expected, but Figure 7 shows that the seasonally adjusted supply fell by only around 4,000 compared to September 2014. This modest fall at the end of 2014 underlines the change in the composition of the supply: growing confidence in the housing market means that more owner-occupied houses are being offered for sale, while on the other hand more houses are being sold.

The slight fall in supply and rise in number of sales is slowly but surely tipping the market in favour of sellers. The NVM's shortage indicator divides the total number of houses for sale by the number of transactions. This indicator fell further in the fourth quarter of 2014. Viewed in this way, a terraced house is now almost as difficult to find as at the end of 2008, but there are still plenty of detached houses available on the market (Figure 8). Finally, there are significant regional differences that affect the overall picture (Van Dalen, 2015).

Figure 7: Supply of houses falling slightly
Figure 7: Supply of houses falling slightlySource: Huizenzoeker.nl, computation Rabobank
Figure 8: NVM shortage indicator falling
Figure 8: NVM shortage indicator fallingSource: NVM, computation Rabobank

Growth to continue in 2015
In 2014 the market experienced strong catch-up growth, partly facilitated by the relaxation of the gift tax exemption and more loans being offered to first-time buyers. The last few months of the year also saw a large number of sales being brought forward, which will cause a sharp fall in the number of transactions during the first few months of 2015. Moreover, the housing market will also have to cope this year with fewer stimulus measures. Even so, we expect that a number of positive factors will be strong enough to keep the market growing this year.

Positive factors for this year
First and foremost, the economic context is extremely important. The Dutch economy is expected to grow this year by 1½% or even a little more (Chapter 1). As far as the market for owner-occupied houses is concerned, it is important above all that employment will continue to improve so that real disposable household income can rise.

Second, owner-occupied houses are highly affordable in 2015. House prices have risen only slightly from their lowest point in 2013, while mortgage interest rates reached a historic low at the end of December 2014. Thanks to the quantitative easing announced by the ECB, we expect a further fall in average mortgage interest rates in 2015 compared to 2014 (see Chapter 3).

Third, confidence in the housing market reached a new record high in the fourth quarter of 2014. This confidence is measured in the Eigen Huis Market indicator published by the Homeowners' Association (Vereniging Eigen Huis) and has been rising continuously for almost two years since January 2013 to a value of 103 in January 2015. This points to a further rise in sales (Figure 9), although perhaps not as strong as the figure might suggest due to the negative equity problem. We see no reason for confidence to weaken, but the possibility of political unrest could be a risk this year: a poor result for the coalition parties in the provincial elections in March could present opportunities for new discussions on policy, which could adversely affect the current recovery on the housing market.

Fourth, the rise in sales of new homes is helping to improve throughflow in the housing market as a whole (Dam, 2010). The number of new homes sold[4] in the first three quarters of 2014 (17,413) shows that the market for new homes is slowly but surely recovering (Figure 10). Compared to 2013, this represents a rise of no less than 87% - even stronger than we had expected. Based on this development, we anticipate a rise in the number of sales recorded by the New Housing Monitor of at least 10,000 to around 25,000 homes for 2014 as a whole.

Figure 9: Confidence points to rise in sales
Figure 9: Confidence points to rise in salesSource: VEH, CBS, computation Rabobank
Figure 10: Rise in sales of new homes
Figure 10: Rise in sales of new homesSource: Monitor Nieuwe Woningen, computation Rabobank

Relatively more households moving up the property ladder in 2015, fewer first-time buyers
In our previous Dutch Housing Market Quarterly we wrote that we did not expect any extra sales in 2015 from the latent demand among first-time buyers. First-time buyers, as expected, seized their opportunity in 2014 as house prices bottomed out and they were helped by temporary stimulus measures. We also saw this in the rise in market share in the cheaper segment in 2014 as described earlier. This means, however, that a large number of sales were brought forward which will not now take place in 2015. We do believe, however, that the strong rise in sales of new homes will largely compensate for this.

We expect that those moving up the property ladder will take over from first-time buyers this year as the driving force behind a further rise in the number of transactions. These movers are expected to be more active this year, partly because the number of households in negative equity is falling compared to 2014. Our own calculations indicate that during the first quarter of 2015 around 26% (940,000 homeowners) have a mortgage loan that is higher than the value of their property. Compared to the first quarter of 2014, this is a fall of more than 130,000 households. Around 30% of this group have ambitions to move: an increase of around 40,000 households this year with such ambitions. In addition, households aiming to climb the property ladder with a residual debt in 2015 have a lower debt burden than in 2014, as the mortgage interest rate on the residual debt in 2015 will be tax-deductible for 15 years. In 2014 this was only possible for ten years. This policy measure means that they can take five years longer to repay the residual debt. Falling mortgage interest rates are also reducing the monthly outgoings even if the mortgage loan is increased, such as for the purchase of a larger house.

Transaction expectations for 2015
On balance we expect between 150,000 and 170,000 sale transactions in 2015. Following the sharp, but expected, fall of more than 20% in the first quarter, we anticipate an average growth throughout the year of more than 5%, which is about 160,000 transactions (baseline, Figure 11). This is our baseline scenario. In a more positive scenario where the economy recovers more strongly than we anticipate at this stage, the fall in the first quarter will be less marked (-15%) and the estimated quarterly growth will average 5½% (stronger growth, Figure 11). In that case the total number of transactions will be 170,000. It should be remembered, though, that in this scenario too the rise in the number of transactions in 2015 will be noticeably weaker than the catch-up driven growth of last year. In a negative scenario, we base our forecast on the assumption that those climbing the property ladder will not compensate sufficiently for the decline in the number of first-time buyers, and the market in the second quarter will remain at the same level following the fall in the first quarter. In that case, around 150,000 homes will change ownership (Figure 11[5], stagnation).

Figure 11: Transaction expectations in 2015: 150,000 - 170,000 (rounded)
Figure 11: Transaction expectations in 2015: 150,000 - 170,000 (rounded)Source: Rabobank

2.2 Prices

Limited price recovery in the fourth quarter
In 2014 the House Price Index (Prijsindex Bestaande Koopwoningen) of the Land Registry/CBS (HPI) recorded an average annual rise (+0.9%) for the first time since the crisis. A major reason for this price recovery has been the rise in the number of sales, generating extra demand for owner-occupied housing which has strengthened the negotiating position of sellers. Seasonally adjusted house prices rose by 0.4% from the third to the fourth quarter of 2014. Compared to the same quarter of last year, this rise was 2.1% (Figure 12). The quarter-on-quarter rise was less pronounced, though, than in the second and third quarter of last year. This would indicate that there is still plenty of supply in the market, also due to a relatively high number of new homes coming on the market.

Figure 12: Price trends
Figure 12: Price trendsSource: CBS, computation Rabobank

Good affordability important for price recovery
Calcasa (2014) notes that the affordability of owner-occupied houses[6] improved further in the third quarter of 2014. Buyers spent an average of 17.3% of their net monthly income on net housing costs. Despite the slight price rises, this is still less than the 18% recorded for the third quarter of 2013 when house prices had just bottomed out. The fall in house prices between 2008 and 2013 together with historically low mortgage rates, particularly for first-time buyers, means that owner-occupied houses are more affordable now than they have been since the 1990s (Calcasa, 2014).

Differences according to house types
The rise in the number of sales is exerting upward pressure on house prices in virtually all segments. However, we are also seeing faster house price rises in the cheaper segment compared to the more luxury segment, in line with movements in the number of transactions per house type (Table 3[7]). We expect that the scrapping of tax-efficient mortgage forms for first-time buyers, such as the savings and interest-only mortgages, will put a firmer brake on price rises in the expensive segments.

Table 3: House price trends in the fourth quarter of 2014 per segment
Table 3: House price trends in the fourth quarter of 2014 per segmentSource: CBS, computation Rabobank

Regional price differences still considerable
There are large differences in the Netherlands between the regions. Selling prices, for example[8] in regions with a relatively large number of expensive homes and/or a falling population have risen more slowly than in the other areas. Price trends in the fourth quarter of 2014 varied markedly compared to the same quarter in 2013, from +21.2% in Zutphen to -9.1% in Southwest Friesland.[9] In urban areas prices are rising faster than in the more peripheral areas. In Amsterdam (+9.6%), Rotterdam (+5.8%) and Utrecht (+5.2%) house prices rose faster than the national average, while in some peripheral regions such as South Friesland and North Limburg they were still falling by 8.1 and 2.6% compared to the fourth quarter of 2013. At the same time, prices in a number of peripheral regions have also been rising slightly: a total of more than 71% of all NVM areas recorded an annual rise (Figure 13). This is consistent with our view that in times of recovery the urban areas are the first to pick up, while the rural areas will follow rather more gradually (Oevering, 2014).

Figure 13: Development of median house price per region
Figure 13: Development of median house price per regionSource: NVM, computation Rabobank

Less supply on the market and falling interest rates will lead to price rises in 2015
For 2015 we expect house prices to continue to recover. The rising number of sales and a falling supply of properties on the market both mean that supply on the market is contracting. This in turn generates upward pressure on prices (Figure 14). Employment and disposable household income will also rise, reinforcing this upward pressure. Finally, average mortgage rates in 2015 will be lower than in 2014, due in part to the ECB's quantitative easing in 2015 (see Chapter 3). As a result owner-occupied houses will remain extremely affordable in 2015.

Figure 14: Less supply on the market points to price rises in 2015
Figure 14: Less supply on the market points to price rises in 2015Source: NVM, CBS, computation Rabobank

However, we do not foresee a rapid rise in the price index. Credit-limiting measures are being continually tightened up, such as the further reduction in the LTV by 1% (to 103% this year), the 0.5% reduction in the maximum rate at which the homeowner may deduct mortgage interest (currently to 51%) and the lowering of the NHG threshold with effect from 1 July 2015 from € 265,000 to € 245,000.[10] Additionally, the Nibud standards for 2015 have become more stringent which is keeping prices down. On balance, however, we do expect that the factors exerting upward pressure on prices will have a stronger effect, and so we anticipate for 2015 as a whole that house prices will rise from between 1 and 3% compared to 2014.

Pieter van Dalen

Chapter 3: Mortgage trends

Total mortgage debt in 2014 probably fell slightly, despite a rise in the number of new mortgages issued. In 2015 the credit restrictions are tighter than last year, partly due to stricter Nibud standards. On the other hand, mortgage interest rates are currently at an historic low. We expect average mortgage rates in 2015 to be lower than last year, prompted in part by quantitative easing by the ECB.

3.1 Total mortgage debt falls due to extra repayments

Total mortgage debt remained virtually unchanged over the course of 2014. At the end of 2013 the total mortgage debt of Dutch households was still € 632 billion; at the end of the third quarter of 2014 this had fallen slightly to € 630 billion (Figure 15). At the time of writing this report, quarterly figures for the total mortgage debt (including mortgages issued by insurers and pension funds) were not yet available for the fourth quarter of 2014. Also the figures on mortgages issued by banks in December 2014 are still unavailable due to a delay in the publication by the Dutch Central Bank (DNB). However, in that month, a significant part of the purchases have been financed with gifts and additional repayments were made, including at Rabobank. Therefore, we expect that the total mortgage volume in the fourth quarter of 2014 declined slightly and ended under the end of 2013 level.

The fact that the macro mortgage debt hardly changed at all during 2014 while activity on the housing market rose sharply has two underlying causes. First, the rise in the number of sale transactions generated a growth in volume, but this growth was not as strong as it had previously been due to lower house prices and a lower average mortgage debt on the house. Moreover, extra repayments were being made alongside these new mortgages. On balance this resulted in a slight fall in the total mortgage debt.

Rise in new mortgages
In line with the rise in the number of house sales, the number of mortgages issued (measured in euros) is also rising. During the fourth quarter of 2014, € 12 billion in new home mortgages was lent, a rise of 48% compared to the fourth quarter of 2013, but still 37% lower than the level reached in the fourth quarter of 2007, the year before the Dutch economy fell into recession. As a comparison, the number of transactions in the fourth quarter of 2014 rose by 43% compared to the last quarter of 2013, but is still 5.9% below the level of the fourth quarter of 2007. Incidentally, the number of refinancing deals in the fourth quarter of 2014 did not rise as fast as the number of new mortgages (Figure 16).

Figure 15: Value of existing mortgages
Figure 15: Value of existing mortgagesSource: DNB
Figure 16: Mortgages issued 2008-2014
Figure 16: Mortgages issued 2008-2014Source: Land Registry

Higher repayments on mortgages
The fact that the total mortgage debt has not risen despite a rise in the number of new mortgage approvals is due to the ongoing trend for households to make extra repayments on their mortgages. During recent years the amount of the extra repayments has therefore also risen. For 2014 we estimate that 2 to 3% extra of the outstanding mortgage debt has been repaid. These extra repayments have been prompted by the low interest rates on savings and a rise in gifts. Negative equity can also be a reason to make extra payments so that the residual debt will be lower when the homeowner moves house.

In 2015 the total amount of extra repayments may fall but will still remain relatively quite high. As long as interest rates on savings remain low, households will still choose to pay off their mortgages or build up capital in a bank or savings mortgage instead of adding to their regular savings. On the other hand, the maximum tax exemption on gifts was halved with effect from 1 January 2015, as a result of which the peak in extra repayments was probably reached in 2014.

3.2 Changes to LTV and Nibud standard from 1 January 2015

The maximum sum that individuals can borrow on the basis of their income if mortgage rates stay the same (the Nibud standard) was reduced on 1 January 2015, just as last year. This also applies to the maximum amount that individuals can borrow in relation to the value of the home (loan-to-value, or LTV).

Reduction in loan-to-value (LTV)
As from 1 January 2015 the maximum loan-to-value was reduced to 103% (in 2014 it was 104%). According to the CBS, the average purchase price of a house in 2014 was € 220,000. With the same purchase price today, this would represent a difference of € 2,200 on average compared to 2014. The maximum LTV will fall by 1% each year to 100% in 2018. This means that a potential buyer will need even more of his own funds to finance the purchase of a house. The future level of the maximum LTV on purchasing a house is still being considered. The Financial Stability Committee (FSC) is studying the recommendations of the Wijffels Committee to reduce the maximum LTV even further after 2018.

Reduction in debt-to-income (Nibud)
In order to determine the maximum mortgage loan compared to income, the Minister of Finance, advised by the National Institute for Family Finance Information (Nibud) sets each year in the Tijdelijke regeling hypothecair krediet (Temporary Rules for Mortgage Loans) the debt-to-income limits for various income categories and interest rates. The debt-to-income limit is the maximum percentage of the income that households may spend on gross mortgage costs. Due to the review of the debt-to-income limits on 1 January 2015, even if mortgage rates remain the same the debt burden capacity of households is falling significantly, as also described in our Economic Report: Stricter Nibud standards will limit price recovery on the Dutch housing market in 2015. On the other hand, as described further on in this report we expect mortgage rates to fall further in 2015, which will go some way towards compensating for the stricter standards.

3.3 Mortgage rates

After reaching historic lows in the third quarter of 2014, mortgage rates fell even further during the last quarter of 2014. In particular the rates for a fixed-rate period longer than ten years fell sharply during the past quarter (Figure 17). In December 2014 the average mortgage interest rate for new mortgages was 2.89% with a fixed-rate period of one to five years, 3.25% for a fixed-interest period from five to ten years, and 3.75% for a fixed-interest period longer than 10 years (DNB). A year earlier this was still 3.4%, 4.1% and 4.7% respectively. Average mortgage rates for all fixed-rate periods are lower than the previous low point in 2005.

Capital market interest rates have also fallen further during recent months. The ten-year euro swap interest rate in early February 2015 was around 0.72% (Figure 18), while in December 2014 it was still averaging 0.9%. It would also appear from recent emissions of residential mortgage-backed securities (RMBS) and covered bonds by banks and insurers that the spreads fell further during past months. These spreads can be regarded as an indicator of the risk premium that banks have to pay to attract capital market finance to enable them to issue mortgage loans. A fall means that the financing conditions for financial institutions have improved.

Figure 17: Mortgage interest rates for new mortgages
Figure 17: Mortgage interest rates for new mortgagesSource: DNB
Figure 18: Swap interest rates falling further
Figure 18: Swap interest rates falling furtherSource: Macrobond

We expect average mortgage interest rates in 2015 to be lower than in 2014. A variety of factors play a role: the recent announcement of quantitative easing by the ECB has already exerted downward pressure on the capital market interest rates and swaps. We also anticipate that the long swap rates may even fall a little further. The ten-year swap is expected to fall still further to 0.65% over six months. These conditions could point in the short term to a further fall in mortgage interest rates. Over a period of twelve months, though, we do expect capital market interest rates to rise again slightly to 1.0%. On balance, the present favourable financing conditions this year will continue to contribute to the recovery on the housing market.

Björn Giesbergen


[1] For an analysis of the relationship between the housing market and consumption of durables, see our Economic Report ‘Recovery on the housing market and consumption of home furnishings: a flywheel effect?

[2]  Rounded to percentage deciles; therefore each column does not add up precisely to 100%.

[3] This also includes houses that have not been sold, which is why the duration of supply is significantly higher than the average selling time for houses in that quarter.

[4] Figures based on the New Housing Monitor (Monitor Nieuwe Woningen - MNW) which covers 75-80% of new owner-occupied homes.

[5] Technical note: the fourth quarter total at the end of 2015 will show a fall in all scenarios, despite a growth over the year as a whole. This is because the fourth quarter of 2014 was exceptionally good, partly as a result of the stimulus measures. We do not expect the fourth quarter of 2015 to surpass this level.

[6] The portion of the net monthly income that households use for net housing costs at the moment of buying a house.

[7] The colours of orange to dark blue show the level of price rises compared to the other segments. Orange indicates the lowest rise compared to the other segments, blue the highest.

[8] Note that this concerns the median house price of the NVM, which does not adjust prices for composition effects. The PBK of the CBS does do this.

[9] These peaks are possible because there has been no adjustment for composition effects.

[10] For a detailed overview of these measures, go to our Economic Report Structurele hervorming op de Nederlandse woningmarkt.


Boonstra, W. and P. van Dalen (2013). Beperken hoogte hypotheek vergt verregaande hervorming van gehele woningmarkt, Het Financieele Dagblad, 9 November.

Calcasa (2014). The WOX quarterly Q3 2014.

Dalen, P. van and P. de Vries (2014). Afloop verruiming schenkingsvrijstelling heeft beperkt negatief effect in 2015

Dalen, P. van and P. de Vries (2014). Stricter Nibud standards will limit price recovery on the Dutch housing market in 2015

Dalen, P. van (2015). Eindejaarsrally Nederlandse woningmarkt sterker dan verwacht

Dam, F. van (2010). Nieuwbouw, verhuizingen en segregatie, PBL Netherlands Environmental Assessment Agency (Planbureau voor de Leefomgeving).

Dijk, M. van (2013). Verliesaversie op de woningmarkt, CPB.

Giesbergen, B. (2014). Herstel op de woningmarkt en consumptie woninginrichting: een vliegwieleffect?

NVM (2015). Aanbodoverzichten Nederland.

Oevering, F. (2014). De stad als kraamkamer: Steden zijn de motor van de demografische ontwikkeling

National Government (2014). Tijdelijke regeling hypothecair krediet


Prices and Sales
Prices and SalesSource: CBS, computation Rabobank
Various price measurements
Various price measurementsSource: CBS, Calcasa, NVM, Kadaster
Issued building permits
Issued building permitsSource: CBS
Capital market: various countries
Capital market: various countriesSource: Macrobond
3-month Euribor
3-month EuriborSource: Macrobond
Interest rate on new mortgages by term
Interest rate on new mortgages by termSource: DNB
Volume of existing mortgages by institute
Volume of existing mortgages by instituteSource: DNB
Volume of new mortgages by term
Volume of new mortgages by termSource: DNB
Unemployment in the Netherlands
Unemployment in the NetherlandsSource: CBS
International comparison of unemployment
International comparison of unemploymentSource: Eurostat
International house price development
International house price developmentSource: Dallas Fed
Economic expectations The Netherlands
Economic expectations The NetherlandsSource: CBS, Rabobank

Key data

Key data


The Dutch Housing Market Quarterly is a publication of Economic Research (ED) of Rabobank, The view presented in this publication has been based on data from sources we consider to be reliable, Among others, these include Macrobond, Land Registry, NVM, DNB, CPB and Statistics Netherlands. The date of completion is 5 February 2015.

This data has been carefully incorporated into our analyses, Rabobank accepts, however, no liability whatsoever should the data or prognoses presented in this publication contain any errors, The information concerned is of a general nature and is subject to change.

No rights may be derived from the information provided, Past results provide no guarantee for the future, Rabobank and all other providers of information contained in this brochure and on the websites to which it makes reference accept no liability whatsoever for the brochure’s content or for information provided on or via the websites.

The use of this publication in whole or in part is permitted only if accompanied by an acknowledgement of the source, The user of the information is responsible for any use of the information, The user is obliged to adhere to changes made by the Rabobank regarding the information’s use, Dutch law applies.

Economic Research is also on the internet: www.rabobank.com/economics

For more information, please call the KEO secretariat on tel, +31 (0)30 – 216 6666 or send an email to ‘economics@rn.rabobank.nl’.

Text contributors:
Pieter van Dalen, Björn Giesbergen, Paul de Vries, Theo Smid and Tim Legierse

Tim Legierse, head of Head National Research, Economic Research

Pieter van Dalen, Reinier Meijer and Selma Heijnekamp

Production coordinator:
Christel Frentz

© 2015 - Coöperatieve Centrale Raiffeisen-Boerenleenbank B,A,, the Netherlands

Pieter van Dalen
Rabobank KEO
+31 30 21 2666
Björn Giesbergen
RaboResearch Global Economics & Markets Rabobank KEO
+31 30 21 62562
Paul de Vries
RaboResearch Netherlands Rabobank KEO
+31 30 21 62666
Theo Smid
Rabobank KEO
+31 30 21 62666
Tim Legierse
RaboResearch Netherlands Rabobank KEO
+31 30 21 62666

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