House prices continue to rise, still 14% below their peak-The Dutch Housing Bubble in numbers

House prices in the Netherlands are continuing to rise but still remain some 14% below their August 2008 peak, the national statistics office CBS said on Friday.

In April, house prices rose by an average of 4.2%, slightly down on March’s rise of 4.3%, which was the biggest in eight years. A house in the Netherlands now costs about the same, on average, as in 2004, the CBS said.

The CBS figures are at odds with those recently published by the national estate agents association  NWM, which said the average house price in the Netherlands had risen 5.5% to €225,000, and is now just 9% down on 2008’s record. The NWM warned in April that house prices in Amsterdam had soared by 20% and are now ‘boiling over’.

Source: dutchnews.nl

The Netherlands Housing Bubble

The Dutch housing bubble is a part of the overall Post-2009 Northern & Western European Housing Bubble that has inflated because of the strong investment inflows that these countries have attracted since the Global Financial Crisis due to their perceived economic safe-haven statuses, serving to further inflate these countries’ preexisting property bubbles that had expanded from the mid-1990s until 2008.

While Dutch housing prices have moderately deflated since 2008 after doubling since the late 1990s, they are still firmly in bubble-territory, according to a report by The Economist magazine. The Netherlands’ property market ranks among the most overvalued property markets in the world, overvalued by over 25% according to price-to-income ratio and price-to-rent ratios, common property-market valuation measures. [1]

Like many countries in recent decades, the Netherlands engaged in a mortgage-borrowing binge that sent property prices soaring, saddling Dutch households with a level of household debt that exceeds 240% of disposable income, the highest level in the euro zone by far. [2]

 

And read here an old article that discusses the very high levels of household debt in the Netherlands. In 2011 Dutch household debt exceeded 240% of disposable income*, the highest level in the euro zone.