House prices are rising sharply this year: wage increases lead to price increases | Economy

CBS reported this week that owner-occupied houses cost an average of more than 433,000 euros in January. That is 1.8 percent more than in January last year. ING predicts an even bigger boom this year, mainly because wages have risen faster than expected. The collective labor agreement wage increase at the end of last year was on average around 7 percent.

“The wage increase will have a significant impact on house prices,” says economist Sander Burgers. “A wage increase is nice in principle, but it is expected to translate into a price increase quite quickly.” Because the mortgage interest rate is also lower than previously anticipated, people can borrow more and therefore offer more. “All in all, buyers have more room to offer this year when purchasing their desired home. This is an important driving force.”

ING previously assumed a house price increase of 4 percent. Overbidding has become the norm again. “It doesn’t help that the housing market is so tight,” says Burgers. It is not becoming more accessible.” Because the production of new-build homes is much lower than necessary, real estate agents also see that buyers are often fishing in the same pond again. Professor Peter Boelhouwer even predicts an ‘infarction.’

According to ING, investors provide a dampening effect. They have become less active and on balance are selling more homes. An important reason for this is the previously announced mid-rental scheme by outgoing Minister De Jonge (Housing), which caps rental prices in the sector. “This development will provide a slightly wider housing supply and dampen the upward force in house prices somewhat,” Burgers said.

House prices reached a record high in the summer of 2022, after which they continued to decline until the summer of 2023.

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