It no longer comes as a surprise. Yet another housing market record has been broken according to the recently published figures for Q3. From June to August 2021, home prices rose by 6.4% compared to the previous quarter. This marks the largest quarter on quarter increase in over 25 years. It shows that the main indicators of the housing market are still pushing their limits.
Standard overbidding on a limited housing supply
With this record increase, the average home price at the end of Q3 reached €401,000. That is the highest average price in the past 10 years and an 18.1% increase compared to Q3 of 2020. The fact that overbidding has become the norm and that more than 80% of homes now sell above asking price continues to fuel the steady price increases of recent years. However, perhaps the biggest factor driving prices even higher during this period is the shrinking housing supply. Compared to the same quarter in 2020, the number of homes for sale has dropped by 44%, from 30,000 a year ago to just 16,500 at the beginning of last month, according to the latest NVM figures.
This growing shortage of homes on the market is bound to lead to even higher prices in the coming months. In this context, it is worth watching the NVM’s housing tightness indicator. This figure shows how many homes a typical buyer can choose from. In Q3, the indicator was at 1.5, meaning buyers now do not even have a choice between two homes.
Average home price per municipality
Home prices are rising everywhere. There is not a single municipality where the average home price has dropped in the past quarter. While it is natural to see big regional differences in pricing, in some cases the percentage increases are extreme. For example, in several municipalities in Friesland, home prices rose by more than 25% in Q3 alone. Compared to the national average of €401,000, prices in the northern provinces are still significantly lower, often around €325,000. But even that signals that the housing market outside the Randstad is also heating up.
In most municipalities within the Randstad, sale prices are generally much higher than the national average. If you are looking to buy a home in Amsterdam or nearby, expect to pay no less than €522,000 on average. The average price per square meter in Amsterdam also rose significantly, crossing the €6,000 mark for the first time in Q3.
Interested in buying in Amsterdam
Want to learn more about the Amsterdam housing market, or are you planning to buy a home in or around the city? Feel free to contact us. We would be happy to discuss your options.
