News housing market
Countryside notices less of dip in housing market
Rabobank predicts that house prices will start to decline from next year. This is despite the economy recovering from the lockdown that took place this spring due to the coronavirus outbreak. It is plausible that prices in the city fall faster than in the countryside. The bank does not comment specifically on the prices of agricultural land.
At the moment there is no sign of a turnaround in the housing market, up to and including July house prices were on average 7,1% higher than last year. In addition, 6,7% more homes were sold. Nevertheless, the economic boom will not last, the lender notes in a quarterly update on the housing market. An economic contraction of 5,2% is expected for this year, which is slightly less negative than previously thought. A cautious recovery will start from next year.
Lower prices, fewer transactions
From 2021, Rabobank will see house prices fall, or rather level off. After all, a fall of 0,8% is still quite modest, compared to the rise in the housing market in recent years. The number of transactions in the housing market will decrease by 30.000 to 190.000 next year. From 2022 there will be a serious price decrease of 2,6%, the bank forecasts. After that, prices move upwards again, due to the persistent shortage.
The reason for the turnaround has to do with loss of income, or the fear of this. This creates uncertainty in the market. The government bailout package helped avert a major unemployment wave, but the bank believes many jobs are at risk. This is because the support measures will be phased out in the coming months.
According to a spokesperson for Rabobank, it is likely that house prices in the city will fall faster than outside it. This is for two reasons. For example, there is a visible trend that people want to 'escape' the busy city and therefore orientate themselves on the housing market in rural areas. Real estate investors are mainly active in the city and they are becoming more cautious due to the corona crisis.
How does agricultural land react?
Rabobank does not mention the prices of agricultural land in the quarterly report. A spokesperson does say that housing plans (on former agricultural land) are not necessarily associated with falling house prices. The government campaigns for the housing shortage in our country continue unabated. There is an indirect connection in the sense that housing plans are initiated by parties in the construction sector, such as project developers. According to the bank, the construction sector will not escape the corona crisis, which may put housing plans 'on hold'.
If we look objectively at the land market, then a price flattening or slight decline is in order. The average price for a hectare of agricultural land in the Netherlands, in the second quarter of 2020, the price remained almost the same as for the whole of 2019, figures from the Land Registry show. The average agricultural land price was €62.000 per hectare. Compared to the first quarter of this year, a slight decrease was visible. According to experts, a structural fall in the price of agricultural land is not obvious. However, a correction is taken into account, as was more common in the past during economic downturns.
Wouter Job
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