The confidence of residential consumers in the housing market is increasing again. This is evident from the new TU Delft owner-occupied housing market monitor. Increased incomes, opportunities to borrow more and a mortgage interest rate that does not rise further, it all contributes to confidence. The fact that homes remain valuable is good news for homeowners.
Due to stable mortgage interest rates and a significant increase in household incomes, often due to inflation adjustment by employers, the maximum borrowing capacity has increased significantly. That immediately translates into more confidence. The disappointing production of new-build homes is less hopeful, especially for starters. Buyers are once again forced to outbid existing homes in order to have a chance at all. The so-called shortage indicator also shows that potential buyers have less to choose from. With a score of 2.1, it is significantly lower than the score of between 5 and 7 in a normally functioning market. The shortage is greatest in Flevoland (1.4), Utrecht (1.6) and Groningen (1.9).
Professor Peter Boelhouwer, who is responsible for the monitor on behalf of TU Delft, is anything but positive. “People drive each other crazy with overbidding,” he says. “That means there is a lot of shortage. Accessibility is becoming increasingly complicated. Both the number of firm plans and the number of building permits are decreasing, which are very bad developments.”
The report calls the current disappointing housing production ‘the greatest threat’ to the dynamics of the market. The new construction plans have been under pressure for almost three years and a turnaround is not yet in sight. “The population is growing, the influx has not stopped and we are going to add fewer homes,” Boelhouwer summarizes. “It’s going to be a heart attack.”
According to the researchers, the development of capital interest rates will play a key role in the coming year. In the monitor they express the expectation that the European Central Bank will reduce the deposit interest rate in the course of 2024, as a result of which the capital interest rate can also be adjusted downwards. “That could have a positive effect on completing the planning operations of new construction plans more quickly and the mortgage interest rate would also move downwards,” the report says. “This could give a boost to both the supply and demand for owner-occupied homes.”
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