In this publication: Persistently low interest rates fuel housing market recovery. Growing mortgage business lures new providers into mortgage market. House sales and prices will both continue to rise in 2016
What is the outlook?
The decline in interest rates is leading to higher valuations in the property market. In 2015, house prices advanced by an estimated 3%. An increase of the same magnitude is likely this year. The economic revival, the affordability of housing and the strong confidence in the housing market all support this expectation. The price rise in 2017 will probably be slightly lower at about 2%, the reason being the slight rise in interest rates that we expect to restrict the maximum mortgage amount via the income criteria.
We expect house sales to weaken even before prices start to lose their upward momentum. This, in fact, was already noticeable in 2015, when sales advanced by less than half the volume of 2014. We project a growth in sales of 5% for 2016 and 2.5% for 2017. Pent-up demand will continue to drive sales. If average sales from 2009 had equalled the average in the preceding period, there would have been 400,000 more transactions. Part of this transaction potential has been lost forever, but if the economic constellation remains favourable, at least part of these deferred purchases will materialise after all.