House prices in Netherlands down 4%, return to 2003 levels

September Data from Netherlands CBS

Prices for September are down over 4% year on year, a moderating of the fall that was -10% mid-summer.

Prices of existing owner-occupied dwellings were at the same level in September 2013 as in early 2003. They were 19.6 percent below the record level registered in August 2008. 

Rabobank thinks housing is undervalued
by 25 to 30 percent, and that prices will recover in another year. But admits that mortgage debt is already among the highest in Europe.

Worth noting that a gain of 30% would more than wipe out the entire decline since the change in world credit spurred by the crisis and would send prices to new highs.

Here are Dutch house prices against average income compared to Britain and US. You can decide if this looks undervalued and ripe for a rise.

Netherlands House Prices down 6.3% for 2012

From Statistics Netherlands

House prices more than 6 percent down from twelve months previously

Prices of existing owner-occupied dwellings sold in December 2012 were on average 6.3 percent lower than in December 2011. The price drop relative to one year previously is again less substantial than in the preceding month. On average, house prices were 5.9 percent lower in 2012 than in 2011. 

Global Property Guide Netherlands

Mortgage market liberalization has also brought new competition. Since 1995, 90% of new mortgages have been not repayable till loan maturity, while 30% do not have to be repaid at all (“interest-only”).

Charts from Global Property Guide

Half a million Dutch are trapped in negative equity

Gloom in polderland

The over-regulated and over-subsidised housing market is in a slump, trapping 500,000 households in negative equity. These two factors have led to a fall in consumption that has not been offset by exports. The budget measures include a few reforms, like removing subsidies for new interest-only mortgages. But nobody is ready to tackle tax relief on existing mortgages. The labour market needs a shake-up to cut the cost of employing older workers and encourage people to work longer hours. The need for structural reforms in Europe is not confined to the Mediterranean—and it is no easier to get voters to back them in the north than in the south.