Dutch housing prices falling gradually

The prices of houses in the Netherlands keep falling, albeit at a substantially slower rate than during the crisis in the early 1980s.

In its Quarterly Housing Market Report, which was published on Monday, ING Bank predicts that housing prices will be 15 to 20 percent lower at the end of next year compared to 2008.

When compared to the first half of the 1980s, ING notes that prices appear to be falling more gradually, whereas the number of sales has been decreasing all the more rapidly.

House agents are reluctant to lower their asking prices because many of their clients face no compelling reason to sell. Unemployment is rising, but not as fast as in the 1980s. Mortgage interest rates, which were skyrocketing at the time, now have dropped.

ING says that another factor is that in the three years before the crisis broke housing prices had not been rising as fast as they did in the late 1970s. Today’s homeowners therefore have far less leeway to lower their asking price without facing extensive residual debt.