The five-year decline in house prices in Netherlands may soon end, as residential real estate in the country is considered significantly underestimated. This statement was made by the economists of Rabobank Groep, a leading mortgage lender in Holland. This is reported by portal ee24.com.
In the report analysts argue that real estate prices will stabilize in Netherlands in the near future and will gradually grow. After examining the data for the period from 1978 to 2011 and forecasting the end of the recession, economists are not able to provide any information neither about terms, nor about the possible pace of recovery of the real estate market.
The Dutch tend to revive the weak market, trying to improve the situation with debts on mortgages, which is one of the worst in Europe. Property prices have fallen by 20% in comparison with the top performance in 2008. The recession, caused by the credit crisis and the weakening economy, was exacerbated by government policies on restricting mortgage-interest tax breaks and loan-to-value caps.
Analysts believe that at the moment about 25-30% of such important factors as the real value of the selling property, the income level and the actual size of the real estate market offer are undervalued. Unsuccessful government action could have a negative effect on the cost of housing in the range of 10-20%.
The prices will likely fall to the end of this year and probably most of the next , as buyers are still concerned about high unemployment and worries steady decline in property prices. According to analysts, the real estate market in the Netherlands will begin to stabilize and recover in 2015, the maximum - in late 2014.
The Dutch economy, being the fifth in Europe, has been declining for the last 8 quarters. Dutch Central Planning Bureau does not expect the economic recovery to start early next year. Experts suggest that GDP will decrease by 1.25% this year and grow by 0.75% in 2014.
Earlier ee24.com already wrote that the apartments along the main canals in Amsterdam range from €5,000 to €9,000 per square meter.
Text: Based on Bloomberg
Photo: web.mit.edu