As if they agreed. Today ING, Rabobank and the Dutch Bank publish reports on the state of the Dutch economy. A sharp negative in the short term and therefore a recession, but the economy will pick up in the long term. Sounds logical, the future will have to show how quickly the recovery will take place and how big the damage will eventually become.
However, the men and women economists agree on the housing market: the solid growth of recent years will not continue. Supervisor DNB writes in its report about the growth expectations of the Dutch economy so far, the effects of the Covid-19 shock on the housing market appear to be limited. Nevertheless, housing prices are expected to come under pressure. ‘
Higher unemployment plus declining income growth and consumer confidence are to blame for this, ‘on the other hand, however, the housing market is still very tight and sentiment in the housing market may turn quickly if the pandemic favors after the relaxation of the contact-limiting measures. ‘ For this year, DNB is counting on a growth of 4.3%, in 2021 it will be forecast at minus 2.1% and the following year at minus 3.7%. However, the regulator is not afraid of a real collapse in house prices: “This price drop is limited in size compared to the turnaround in the aftermath of the credit crisis, when prices fell by a total of almost 20%.”
The housing market will decline further in calculation models in which the economic downturn increases, something Rabobank is also hesitant about. The economists employed by the farmers’ lending bank write that a possible second wave will be detrimental to price developments because the high mortgage debts will quickly start to pinch. In your own words:
‘In a second virus wave and lockdown period with sharply rising unemployment, the housing market poses a specific Dutch risk. Because, thanks to stricter repayment and income requirements, the average ‘loan-to-values’ are lower than during the low point of the housing market crisis in 2013, they are still relatively high compared to other countries. Especially people who have recently bought a house and fully financed it with a mortgage run the risk of being flooded when house prices fall. This may lead to a decrease in consumption, which reinforces the economic downturn. “
ING is slightly more optimisticAlthough the Oranje Leeuw economists write in their monthly update that confidence in the housing market has been hit, the shortage is mainly put forward as a stable foundation for the housing market. It goes without saying that the economists who dared to take a look inside the glass sphere speak about the entire Dutch housing market, as we know that there are major differences within and outside the Randstad.
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