Housing market analysis 20232024: figures and opportunities
The Dutch housing market remains complex and dynamic. Recent figures from the Dutch Association of Realtors and Brainbay provide interesting insights on the status of the housing market in 2023. In addition, we look at the impact of upcoming changes in mortgage rules.
Current state of affairs
The overall overview of the housing market shows a 13.6% increase in the number of homes sold compared to the previous year. In the process, the average selling price per square meter increased by 6.2%, representing a transaction price of €3,933 per square meter. A notable shift is the duration of supply, the number of days a house is for sale, which is now 84 days, representing an increase of 71.8%.
In doing so, we see a worrisome trend in the ratio of available housing units to transactions, referred to as the tightness indicator (KI). In November 2023, it stood at 1.9, meaning only 1.9 housing units available per transaction. Which shows the limited choices available to home seekers.
This is a striking paradox. Although it appears that more homes are available, they remain on the market longer. An apparent opportunity offset by an imbalance between the asking price and the average purchase price. There are quite a few for sale, but in a price range where there is precisely not enough demand.
Frequently asked questions about the housing market
Is overbidding a thing of the past?
No, we see mostly higher price range homes on the market. Demand and supply do not match well, which affects the tightness indicator. In high-demand real estate, overbidding is still occurring.
Can we say that sellers overestimate their homes?
No, not that either. Rather, I think we can conclude that the larger (read more expensive) homes remain stuck in the market. Until recently, you could live bigger because of low interest rates, but at the same cost. Now people are not so quick to do that. Price is a major motivator for this. Eventually these homes do sell, but the lead time has now doubled.
What opportunities do you see in the changing rules of 2024?
Despite the current tightness, as a home seeker you can take advantage of opportunities in terms of smart negotiation when buying. And get in touch early on with a mortgage broker and a real estate agent who can assist with the purchase and negotiation. In addition, you can consider making your current home more sustainable.
Upcoming changes to loan standards (2024)
As of January 1, 2024, mortgage lending standards are undergoing changes. Minister Hugo de Jonge announced that households will have more borrowing space for the purchase of an energy-efficient home and for making their own homes more sustainable.
An important change is that the loan area is now linked to the energy label of the home. This means more can be borrowed to make homes with lower labels more sustainable, with savings expected on energy bills.
Former students are also seeing changes in calculating the impact of student loans on their maximum loan amount. Instead of looking at the original size of the student loan, they are now looking at the current burden of the loan, better accounting for additional repayments.
Single people with an income of at least €28,000 will be able to borrow an additional €16,000 from 2024, giving them more financial leeway when buying a home.
Additional rules in 2024 and opportunities
The Mortgage Credit Amendment Regulation 2024, set by the government, defines the lending standards for 2024 mortgage lending. The borrowing space will depend on the home's energy label, where for homes with energy labels E, F or G, the borrowing space may tighten, but increase for homes with better energy labels.
The current installment amount of the student loan affects the loan space, and additional loan space is available for singles with incomes above €26,000.
Mortgage lenders must also consider the consumer's future expected income and assets at state pension age if the consumer reaches state pension age within 10 years of applying for the mortgage.
Opportunities for buyers lie in taking advantage of new lending opportunities, including additional financing for sustainability and the ability for single people to borrow additionally.
The widening of the starter exemption also offers opportunities. Whereby the NHG limit goes down again and thus offers more room for suitable financing.
Conclusion
With the dynamic housing market ahead, it is crucial for prospective buyers to understand not only the numbers, but also the upcoming changes in lending standards and insights. Finding the right balance between housing needs and financial risk is essential. By preparing well, engaging professionals, and taking advantage of new lending opportunities, buyers can position themselves more effectively in the market in 2024.
