Robust Growth Ahead: ABN AMRO Predicts 7% House Price Rise in 2025, Driven by Lower Mortgage Rates and Tight Supply

Robust Growth Ahead: ABN AMRO Predicts 7% House Price Rise in 2025, Driven by Lower Mortgage Rates and Tight Supply

(IN BRIEF) The Dutch housing market, having rebounded strongly in 2024 with an 8.7 percent price increase, is expected to maintain its momentum with projected rises of 7 percent in 2025 and 3 percent in 2026. ABN AMRO attributes this growth to lower mortgage rates, ongoing housing shortages, and higher household incomes—factors that are especially influential in areas around Utrecht and rural regions, although growth in cities like Amsterdam, Rotterdam, and The Hague is anticipated to be less pronounced. The bank also revised its forecast for transaction volumes in 2025 to a 5 percent increase, up from 2.5 percent, driven by private investors selling rental properties amid new tax regulations and the Affordable Rent Act. Despite early-year challenges including a temporary slowdown in price increases and external geopolitical factors, stable household finances and a tight housing supply suggest that the market will continue its upward trajectory.

(PRESS RELEASE) AMSTERDAM, 3-Apr-2025 — /EuropaWire/ — The Dutch housing market continues to show resilience and growth. Following a challenging year in 2023, house prices surged by an average of 8.7 percent in 2024, reaching record highs. ABN AMRO forecasts that this upward trend will persist, with prices expected to rise by 7 percent in 2025 and 3 percent in 2026. The forecasted growth is primarily driven by a combination of lower mortgage rates, a persistent housing shortage, rising household incomes, and robust demand in areas around Utrecht and rural regions. In contrast, growth in major cities such as Amsterdam, Rotterdam, and The Hague is anticipated to be more subdued.

The bank has also revised its transaction volume forecasts for 2025, now expecting an increase of 5 percent—up from an earlier estimate of 2.5 percent—while predicting a modest 1 percent rise in 2026. This boost in transactions is partly attributed to private investors capitalizing on new tax regulations and the Affordable Rent Act by selling off rental properties. Despite slight headwinds earlier this year due to rising mortgage rates—affected in part by changes in Germany’s debt policy—and lingering geopolitical uncertainties, demand for housing remains strong. However, the supply side continues to lag, with government efforts to stimulate new home construction yet to yield significant results.

Mike Langen, Senior Housing Market Economist at ABN AMRO, noted that while a temporary pause in price increases was observed in February, the overall trend points toward continued growth. With households remaining financially stable thanks to strict loan conditions, high house prices have not translated into financial stress for homeowners. Overall, the outlook remains positive for the Dutch housing market as it navigates through economic and geopolitical uncertainties.

Media Contact:

Hans Sjouke Koopal
Sr Press Officer
hans.sjouke.koopal@nl.abnamro.com
+31 (0)20 3009154

SOURCE: ABN AMRO