Now that mortgage rates continue to rise sharply and the owner-occupied housing market cools, many home seekers and homeowners are faced with a dilemma: move forward with the sale, outbid with less money or wait for a possible fall in prices? Two experts give advice – although you can’t call it advice.

    Stefan ten Teije

    Jun 24 2022

    The cooling off of the owner-occupied housing market has to do with the mortgage interest rate, which in many cases has tripled in six months. On average, interest rates rose from 1.4 to 3.8 percent. Borrowing capacity is declining, financing is becoming more expensive, on top of the increasing cost of living (inflation).

    Makelaarsland came out this week as one of the largest real estate agencies in the Netherlands with striking figures: fewer viewings, fewer bids. The supply of houses for sale is also increasing rapidly and sales are lagging behind. The house price is still rising according to CBS and the Land Registry, but because they register the transfer of the house, the signaling is somewhat behind. Real estate association NVM already recorded a 2.1 percent drop in house prices in the first quarter compared to the last quarter of 2021, an average decrease of almost 9,000 euros in three months.

    The number of houses for sale is increasing rapidly and sales are lagging behind, according to figures from housing platform Funda. © ANP

    Mortgage interest not yet incorporated in house prices

    The question is therefore justified what house seekers should do in the current situation. “The answer is difficult to give,” warns Nic Vrieselaar, economist at Rabobank. ,,Of course it depends on whether you are sitting on hot coals and have to move, or whether you have the luxury of being able to wait. If you are getting a divorce, the need is great and I understand that you are inclined to take the step. If you still live with your parents and you can keep that up for a while, it might be understandable to take a step back for a while. The increased mortgage interest has not yet been incorporated into the housing market, which means that prices are still high and the monthly costs are completely due to that high interest rate.”

    An option is of course to offer at least a little less high. The opportunities on the housing market grow, even if you have less money to contribute. Figures from De Hypotheker already show that it is mainly people moving up that take a step back.


    We hear from mortgage advisors that they already indicate in their conversations: would you take a bridging loan of 100 percent for the purchase of your next home?

    Marga Lankreijer, mortgage expert Independer

    “For transferees, it is also important to take into account a slightly lower equity value than you have previously calculated,” says Marga Lankreijer, mortgage expert at Independer. “We hear from mortgage advisers that they already indicate this in their conversations: would you bridging loan take 100 percent on your next home purchase if your home hasn’t sold yet, or do you keep it at 80 or 90 percent? And if you still calculate with the full amount of the equity, it is better to ensure that you have extra savings in reserve in case the selling price is disappointing.”

    Care is growing among people who don’t sell their house quickly


    In our estimates, we do not yet assume that house prices will fall this year. They come to a stop first

    Nic Vrieselaar, economist Rabobank

    According to Lankreijer, there are currently weekly customers who ‘panic’ because they expected their house to be sold quickly and well. ,,Then after a few weeks there were only one or two viewers. Ten years ago your house could be for sale for a year, but people are no longer used to it. They wonder whether they should lower the price and what the consequences will be for the mortgage. It’s good to ask about that, so you can anticipate it.”

    Perhaps there are now also people who sell their house first, before they make their own move. ,,It is uncertain whether that is the right strategy. In our estimates, we do not yet assume that house prices will fall this year,” says Vrieselaar. “They are expected to come to a standstill first and, moreover, it remains a gamble what will happen next. Who knows, interest rates may fall again. Or the cabinet intervenes with measures that prop up house prices, that is also possible. We don’t know what will happen because we are in an exceptional situation with high inflation, relatively high interest rates, high house prices, an energy crisis and a war.”

    The most important thing that home seekers can do: keep checking with their adviser what the costs will look like, says Lankreijer. “If you were told a few weeks ago that you monthly payments For example, if you bid 350,000 euros, that can already be significantly higher due to the increased interest. You do need to know what the effect is and what your monthly payments will look like once the house has been bought.”

    “Ask yourself: what’s at stake?”

    For people who (want to) move from an existing owner-occupied home to a new-build home, the dilemma is even greater. “If you buy now, you can only move in in a year and a half,” Vrieselaar outlines. “In recent years, the house has always been worth a lot more if you waited longer to sell. It may well be that prices drop after purchase. I’m not allowed to give advice, but if I were in the situation myself, I’d ask myself what the risk is if mortgage rates continue to rise. What’s at stake? Maybe I would sit on the safe side myself, if only for your peace of mind.”

    Rising construction prices are also a risk for movers to new construction. Construction companies use war clauses to prevent them from taking on a project for too low a price and then running into significantly higher costs for materials or personnel. The danger lurks that they won’t be able to finish the house for the same price. In some cases, banks are already taking a possible price increase into account. “Consider the finishing touches, such as additional work, the purchase of a bathroom or kitchen,” says Lankreijer. “Sustainability measures may also be necessary, especially for houses with a poorer energy label. You can borrow extra money for that, but you have to be willing to pay that.”