Residential real estate prices forecast change in the Netherlands 2022-2023

The quarterly pulse monitor expects the Dutch house prices to fall by 2.5 percent in 2023 due to the decline in purchasing power, higher cost of borrowing and worsening economic conditions. The price of Dutch residential property in 2021 was approximately 437,000 euros. These developments came on top of other issues that were already prevalent in the Dutch housing market, such as the discussion about nitrogen and its effect on housing construction.

The effects of nitrogen on the price of a house

At the end of 2019, months before the coronavirus, there was already a lot of uncertainty whether their predictions would hold true. This had to do with the so-called “nitrogen decision” (in Dutch: stikstofbesluit) in May 2019. Simply put, a Dutch advisory body found that the domestic policy for nitrogen emission (formally known as Programmatische Aanpak Stikstof or Programmatic Approach Nitrogen) went against European rules. As of August 2019, a sizable share of the Dutch population was not familiar with this nitrogen policy. However, the advisory body’s decision led to an immediate stop to all construction in the country (amongst other things). By the end of 2019, this stop was still in place. For 2020, newly to be constructed houses have to comply to new rules regarding nitrogen emission. This puts new pressure on a housing market that already had to keep with increasing demand.

How about the housing market in Amsterdam?

Amsterdam, Haarlem and Haarlemmermeer (two areas surrounding the Dutch capital) were the cities and/or municipalities with the highest house prices in 2021. On average, a house in Amsterdam sold for over 100,000 euros more than a house in Utrecht. Amsterdam was also well above the average rents found in other cities. A house in Amsterdam had a rent of approximately 22 euros per square meter in 2021, whereas rents in Rotterdam costed roughly 15 euros per square meter. It should be noted, however, that rent changes in the Dutch capital are significantly lower than those found in Rotterdam and especially Utrecht.