Home price data from the Netherlands supports the view that prices will fall this year following 2022’s sharp deceleration in growth, Fitch Ratings says.

Data from Statistics Netherlands show that average nominal home prices increased by just 2.7% in 2022, down from 20% in 2021. Some of this momentum carried over into 2022 as prices rose 7.6% from January to July, before falling over the remainder of the year.

Prices were unchanged in the first two months of 2023, with January’s 1.5% month-on-month increase being exactly offset by a 1.5% decline in February.

These figures are broadly consistent with Fitch’s forecast for the country, published last December. The firm stated: ‘Annual price growth last year was below our 5% forecast, highlighting the impact of dampened borrowing capacity and demand due to mortgage rates rising as the ECB increases policy interest rates, while very high inflation put pressure on households’ mortgage affordability.’

Statistics Netherlands’ data show that the number of transactions fell by 15.5% y-o-y in February 2023 to a seven-year low of 11,858 property sales. Fitch has not changed its forecast for nominal home prices in the country to fall by 4-6% this year.