ABN Amro increases house price estimates for this year and 2025

House prices will continue to rise in 2025, although growth will weaken slightly compared to this year, economists from ABN Amro expect. In a report on the housing market, the bank predicts a price increase in owner-occupied homes of 8.5 percent in 2024 and 7 percent in 2025.

This means that the bank's previous estimates of increases of 7.5 percent this year and 5 percent next year have been adjusted upwards. House prices are mainly driven by wage increases and falling mortgage rates. This allows people to borrow more money. "This increases competition in the housing market and outbidding occurs more often," says Philip Bokeloh, Housing Market economist at ABN Amro.

According to him, the increased confidence of potential home buyers also has an upward effect on house prices. Bokeloh notes that existing homes are rising in price faster than new-build homes. 'In combination with the lower mortgage interest rate, new-build homes are becoming more attractive again. This leads to more families moving to new-build homes and their existing homes becoming available," the economist says.

This also ensures that more homes change ownership. ABN Amro does expect this effect to largely disappear next year. This is because the flow to new construction is likely to stagnate in the course of 2025 due to a lack of newly completed homes. To date, approximately 90,000 homes have been under construction, which will only be completed in one to two years. "As a result, the government target of at least 100,000 new homes annually remains out of sight for the time being," Bokeloh notes.

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