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7. Netherlands House Prices - insights for UK and Dutch investors


06-11-2004

Dutch Residential StreetThere has been much talk in the UK of a future property price crash - the so called "boom-and-bust scenario". However, property has come off the boil without a crash in Ireland, Australia and The Netherlands recently.  PropertyInvesting.Net has unearthed definitive data from The Netherlands (all provinces, Kadaster.nl) which show that despite the economy going into recession in 2003 (higher unemployment and GDP growth of -2%) house prices rose slightly in most areas - the boom of 1998 to 2002 did not end in a bust - latest data for 2004 confirms this.

Whether this will be the case in the UK remains to be seen, but with GDP growth at 2.5% and unemployment still falling, it is difficult to see there would be a crash as long as interest rates did not sky-rocket - something which is not expected (base rates are expected to rise to 5.5% in 2005 from 4.5% this month).

The only caveat to this analysis is that The Netherlands mortgage rates are currently only ca. 3.3%, so low borrowing costs and fixed rates have probably helped support prices during a period of economic doldrums. Another point worth noting is that The Netherlands has a similar supply shortage as England and Wales, increasing home ownership and similar demographic growth to the UK.  

Dutch Province House Prices

Dutch Province Flat Prices

House and Flat Price Increases in Netherlands Provinces 1997-2003

In Euro ('000s)

Source: Kadaster.nl

Groningen

Year House Percentage Flat Percentage
1997 82.981   62.559  
1998 89.594 8,0% 66.493 6,3%
1999 101.433 13,2% 74.302 11,7 %
2000 119.318 17,6% 82.734 11,3%
2001 139.369 16,8% 93.305 12,8%
2002 151.355 8,6% 108.503 16,3%
2003 158.328 4,6% 114.662 5,7%
Friesland
Year House Percentage Flat Percentage
1997 83.521   58.804  
1998 91.877 10,0% 77.296 31,4%
1999 108.72 18,3% 77.535 0,3%
2000 131.094 20,6% 77.456 -0,%
2001 145.836 11,2% 90.47 16,8%
2002 161.471 10,7% 106.06 17,2%
2003 165.828 2,7% 114.329 7,8%
Drenthe
Year House Percentage Flat Percentage
1997 98.148   65.077  
1998 110.054 12,1% 75.229 15,6%
1999 128.198 16,5% 83.014 10,3%
2000 152.85 19,2% 93.221 12,3%
2001 169.737 11,0% 99.17 6,4%
2002 177.661 4,7% 120.6 21,6%
2003 182.084 2,5% 126.295 4,7%
Overijssel
Year House Percentage Flat Percentage
1997 105.171   67.753  
1998 114.575 8,9% 77.038 13,7%
1999 133.929 16,9% 83.975 9,0%
2000 161.08 20,3% 94.892 13,0%
2001 179.376 11,3% 110.859 16,8%
2002 186.737 4,1% 124.426 12,5%
2003 194.091 3,9% 127.104 2,2%
Flevoland
Year House Percentage Flat Percentage
1997 100.255   78.179  
1998 109.367 9,1% 88.311 13,0%
1999 124.397 13,7% 98.129 11,1%
2000 158.033 27,0% 120.747 23,0%
2001 162.002 2,5% 150.349 24,5%
2002 181.506 12,0% 147.708 1,8%
2003 190.563 5,0% 160.512 8,7%
Gelderland
Year House Percentage Flat Percentage
1997 130.747   80.262  
1998 146.637 12,2% 90.555 12,8%
1999 171.193 16,7% 107.169 18,3%
2000 204.333 19,4% 125.349 17,0%
2001 224.343 9,8% 138.725 10,7%
2002 232.886 3,8% 146.914 5,9%
2003 236.386 1,5% 153.775 4,7%
Utrecht
Year House Percentage Flat Percentage
1997 148.844   92.583  
1998 163.762 10,0% 107.477 16,1%
1999 196.453 20,0% 127.794 18,9%
2000 234.867 19,6% 142.218 11,3%
2001 251.773 7,2% 155.53 9,4%
2002 263.63 4,7% 160.894 3,4%
2003 265.532 0,7% 167.699 4,2%
Noord-Holland
Year House Percentage Flat Percentage
1997 136.129   93.382  
1998 155.034 13,9% 108.886 16,6%
1999 184.527 19,0% 133.23 22,4%
2000 222.028 20,3% 164.739 23,7%
2001 239.19 7,7% 184.318 11,9%
2002 252.516 5,6% 190.889 3,6%
2003 254.435 0,8% 189.605 -0,7%
Zuid-Holland
Year House Percentage Flat Percentage
1997 137.408   75.179  
1998 145.389 5,8% 84.224 12,0%
1999 166.501 14,5% 95.988 14,0%
2000 202.756 21,8% 110.518 15,1%
2001 223.377 10,2% 123.034 11,3%
2002 235.941 5,6% 134.629 9,4%
2003 246.479 4,5% 139.54 3,6%
Zeeland
Year House Percentage Flat Percentage
1997 88.317   64.861  
1998 94.272 6,7% 82.249 26,8%
1999 104.804 11,2% 84.678 3,0%
2000 120.233 14,7% 94.281 11,3%
2001 136.99 13,9% 109.628 16,3%
2002 154.425 12,7% 119.236 8,8%
2003 169.557 9,8% 137.99 15,7%
Noord-Brabant
Year House Percentage Flat Percentage
1997 128.802   80.658  
1998 141.262 9,7% 97.906 21,4%
1999 163.226 15,5% 109.445 11,8%
2000 194.698 19,3% 133.533 22,0%
2001 218.209 12,1% 149.46 11,9%
2002 232.813 6,7% 159.937 7,0%
2003 240.583 3,3% 162.724 1,7%
Limburg
Year House Percentage Flat Percentage
1997 119.826   70.951  
1998 127.121 6,1% 77.288 8,9%
1999 146.765 15,5% 85.541 10,7%
2000 168.516 14,8% 98.194 14,8%
2001 175.393 4,1% 106.858 8,8%
2002 184.957 5,5% 120.846 13,1%
2003 188.433 1,9% 123.135 1,9%

The house prices up to April 2004 show a steady rise in price - with a two year average for both flats of 8.3% and house 8.1%. There are not signs as yet of a house price crash - rather the market has cooled and is now rising at a far slower pace of 4% per annum as compared to 10-25% in previous years.  

Latest Dutch House Price Increases (up to end April 2004)
Source: Kadaster.nl            
    Houses Flats Houses and Flats
Year Month Purchase Price Number ('000s) Purchase Price Number ('000s) Purchase Price Number ('000s)
x 1000 EUR x 1000 EUR x 1000 EUR
2004 April 234 11.757 160 4.732 213 16.489
2004 March 232 11.032 157 4.582 210 15.614
2004 Febuary 231 9.489 156 3.798 210 13.287
2004 January 227 7.157 155 3.169 205 10.326
2003 December 232 17.974 157 6.664 211 24.638
2003 November 226 10.892 155 4.264 206 15.156
2003 October 226 12.699 158 4.644 208 17.343
2003 September 225 12.308 153 4.498 205 16.806
2003 August 224 11.864 151 4.171 205 16.035
2003 July 223 12.946 152 4.544 205 17.49
2003 June 224 10.575 153 3.854 205 14.429
2003 May 221 12.295 151 4.368 203 16.683
2003 April 222 11.033 151 4.111 203 15.144
2003 March 220 10.282 150 4.065 200 14.347
2003 Febuary 218 9.724 153 3.663 200 13.387
2003 January 222 8.438 151 3.385 202 11.823
2002 December 219 15.841 150 5.47 201 21.311
2002 November 218 11.568 152 4.236 200 15.804
2002 October 220 11.841 152 4.348 202 16.189
2002 September 224 11.425 150 4.21 204 15.635
2002 August 223 12.657 152 4.493 205 17.15
2002 July 219 14.849 150 4.966 202 19.815
2002 June 218 11.761 148 4.207 199 15.968
2002 May 218 12.962 146 4.607 199 17.569
2002 April 216 10.613 148 3.931 197 14.544
               
2 yr % increase   8.3%   8.1%   8.1%  

Prices have been fairly steady, though they did drop September 2002 to April 2003 during a period of Middle East troubles, global uncertainty and SARS. This also corresponded to a brief recession in Holland and slowdown in the USA. Prices since September 2003 have started rising robustly, particularly for flats - this is probably driven by low interest rates, a moderate pick-up in the economy and shortage of supply for property. Growth in 2003 in Zeeland and Zuid Holland (Rotterdam/The Hague) was particularly strong.

Dutch Prices

Transactions are rising in 2004 though this is a seasonal trend - the amount of transaction is still lower than in mid 2002. This is probbaly because the economy has just come out of recession - activity levels are not high. 

Dutch Transactions

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