AMSTERDAM — The price of an average house increased by a hefty 6.4 percent in the first quarter of 2004 compared with the same period last year, real estate agent association NVM said on Wednesday as it reversed an earlier negative outlook.

Compared with the price in the last three months of 2003, houses increased in price by 1.2 percent in the first quarter of this year and an average home now costs EUR 216,000, public news service NOS reported.

NVM is optimistic about future developments in house prices, having expressed at the start of 2004 concern that housing values will fall due to the recession last year.

An improving market has stimulated the housing market, as have legislative changes regarding mortgage tax, newspaper De Telegraaf reported.

Due to lower mortgage rates and an expected continued increase in house prices in the second quarter, the NVM has forecast that house prices will rise more quickly  than inflation in 2004.

Housing prices increased 2.7 percent in 2003 while the Central Bureau of Statistics (CBS) said inflation reached 2.1 percent. The CBS expects inflation to be restricted to 1.3 percent this year.

The number of homes on the market remained at about 75,000 last quarter, equal to the last two quarters of 2003. That is 10 percent above the 68,000 houses that were on sale 12 months previously.

[Copyright Expatica News 2004]

Subject: Dutch news