Dutch housing market continues to show signs of chilling

Worsening affordability , weakening GDP growth and lack of adequate housing supply have gradually undermined housing demand in the Netherlands . Accordingly, h ome sales went down by 8.3% over the year in the twelve months to June and house prices slowed to 6.9% y/y in June compared to average growth of 9% last year. At the same time, there are offsetting factors that will shore up housing demand : i/ ongoing accommodative monetary conditions, ii/ improved households’ financial situation owing to gradual reduction in household debt, and iii/ a low unemployment rate along with rising wages. In addition, lasting supply shortages will be only gradually tackled adding to price pressure in the housing market. We expect house price growth of about 6% this year and somewhat below 5% next year.