Dutch Housing Market Continues to Boom Despite Covid-19

(Bloomberg) -- The fallout from the coronavirus shows no sign of derailing a boom in the Dutch housing market.

The average price of a home climbed 8.8% in the second quarter from a year earlier to 335,000 euros ($380,000), realtor’s association NVM said on Thursday. More houses than ever were sold above the asking price.

“Although there are fewer buyers in absolute terms, people are still outbidding to get the desired home,” NVM chairman Onno Hoes said in a statement. As investors and expats stay away, locals have more opportunities, according to Hoes.

A lack of homes has made the Netherlands one of Europe’s hottest property markets. After six years of rising prices, NVM expects growth to slow to between 4% and 6% in 2020 after an 8% rise last year as the government introduces measures to increase construction and damp demand in big cities. In Amsterdam, for example, investors are no longer allowed to buy newly constructed homes in order to lease them out.

Prices are holding up even as the Netherlands heads for a recession in the wake of the pandemic. The economy is expected to shrink 5.6% this year, according to the median estimate of economists.

Real estate agents have reported an increase in demand throughout the country for houses with an extra study room, a balcony or a garden, NVM said. That’s after the government recommended in March that people work from home as much as possible.

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