Forecast for the Amsterdam housing market

This is an uncertain period for virtually all markets and sectors, and the housing market is no exception. For a long time, all we heard about was ever-rising home prices. That trend now appears to have come to a halt. Currently, there are many factors influencing the housing market. Housing shortages, shortages of raw materials, political uncertainty, inflation, and rising interest rates. You can read about how we got to this point and where we stand right now in our blog.

Housing Market in Early 2022

We look back on a lot of changes at the start of 2022. For example, the price per square meter rose by as much as 17%. Home prices skyrocketed and demand continued to grow. The expectation was that the number of transactions would decline this year because it was simply too expensive to move. This expectation is reinforced by uncertainty.

Rising raw material prices are weighing heavily

The war in Ukraine has caused raw material prices to rise sharply. Sanctions against Russia mean that they are no longer allowed to supply their products to the EU. The EU is now sourcing these raw materials from other countries at a higher cost. And this increase is also affecting the housing market. While home renovations were previously very popular when people were spending a lot of time at home, this trend now appears to have temporarily stalled. As a result, people are thinking twice before actually taking action.

We, as real estate agents, have also seen this firsthand. As real estate agents, we’ve noticed that move-in-ready homes are becoming more popular and selling faster.

Rising mortgage rates

In addition to uncertainty surrounding the war, there are other factors at play in the changing situation in the housing market. Interest rates were very low for a long time, making it very attractive to take out a mortgage and buy a home. This had a stimulating effect on the housing market, particularly on home prices. Currently, mortgage rates are rising, making borrowing money less attractive. Consumer wealth is declining, and combined with falling purchasing power, this means fewer major purchases can be made.

We certainly see this reflected in practice. House prices seem to have come to a standstill. However, the market is not standing still. The price per square meter is still rising. Whereas homes priced at 800,000 used to sell easily, this is now becoming increasingly difficult because people can borrow less.

Supply is rising, demand is falling

As real estate agents, we sense that the market is shifting. Changes also appear to be underway in terms of supply and demand. Demand has consistently been very high, and supply has been unable to keep up. Due to all these developments, demand for homes in Amsterdam seems to be declining. In contrast, home sales appear to be on the rise. More homes than usual are being listed on Funda, and we’re also seeing an increase in the number of homes listed on Amsterdam at Home. It’s still too early to say with certainty exactly how this trend will develop. However, we can share our expectations based on current data, market trends, and our experience.

How do we, as real estate agents, view the future?

Based on our data and market sentiment, we expect a slight increase in average home prices this year, along with a significant rise in the price per square meter. The current market trends are expected to continue into 2022. Relatively small homes will continue to sell at high prices per square meter, while larger homes will remain on the market. With a note of caution, we also dare to say that in 2023 we will see a slight stagnation in the price per square meter, resulting in a decline in the average transaction price.