- Category: The Dutch housing market
- Created on Monday, 21 January 2013 16:05
- Written by Amsterdam Herald
The latest figures suggest the slump may have passed its worst point, with the speed of the decline slowing for the third month in a row.
Houses are now worth 16.6 per cent less on average than at the peak of the boom in August 2008, and the National Association of Estate Agents (NVM) is projecting a drop of up to 7 per cent this year.
Analysis of the figures from Statistics Netherlands (CBS) shows prices have retreated to 2004 levels, meaning anyone who bought a house since then is likely to sell at a loss if they put it on the market now.
When moving and legal costs are taken into account only people who bought before the turn of the century can expect to make a profit, according to research by Amsterdam University. That leaves some 700,000 Dutch households at risk of negative equity, where the house is worth less than the debt attached to it.
Some regions have seen more than a decade of property values wiped out, with Limburg and Flevoland back at January 2002 levels.
Even the provinces where prices have held up comparatively well, such as Noord-Holland, have dropped down to values last seen in March 2005.
Across the country house prices fell by 5.9 per cent during 2012 and by 6.3 per cent in December. The rate accelerated in the first half of the year, reaching 8 per cent in August.
The CBS’s figures also show the number of house sales fell to 117,261 in 2012, almost 3 per cent lower than the previous year and continuing a downward trend that dates back to 2006.
That figure was boosted in part by a late surge in purchases by buyers trying to beat the cut-off point for the older, more generous tax relief system.
The last month of the year saw an extra 4000 houses sold compared to December 2011, an increase of 32 per cent.
Since January 1 tax relief has been abolished for interest-only mortgages as the government looks to cut its own costs and the country’s overall mortgage liability, which is the highest in Europe.