Despite the gradual economic improvement in the Netherlands, (unemployment is just above 4%), the average property price fell by -1.9% at the end of the second quarter this year, compared to 12 months earlier, according to Statistics Netherlands.

More optimistic figures have been produced by the Dutch Association of Real Estate Agents (NVM), although they still show median house prices dropping by -0.6% during the year to Q2 2011. NVM reports that house prices actually rose by 3.1% in the second quarter of this year.

During the year to end-Q2 2011, according to NVM, Amsterdam, house prices rose by 4.2% and The Hague property prices increased by 2.1%. However, Rotterdam property prices fell by -3.75% and Utrecht property prices also fell by -1.9%.

There could be further price falls however. NVM reports that in Q2 2011, the total number of house sales was 30,300 units, down -8.6% from the same period last year, and the number of houses for sale rose by 17.3% in the year to Q2 2011.

In July 2011, the European Central Bank (ECB) raised the benchmark rate to 1.50%, its second rate hike this year from an all-time low of 1%. This resulted in a slight increase in the average mortgage rate in the country to 4.68% in June 2011.

To boost the housing market, the Dutch government recently cut the purchase tax (stamp duty) from 6% to 2%. This will apply until June 2012.