Dutch house prices continued their upward trajectory in January, reaching a new record high despite a moderating pace of growth. The average price of an existing owner-occupied home now stands at €493,875, a 5.4% increase year-on-year, according to data released on Monday by the national statistics agency CBS and the land registry department.
While the year-over-year increase remains significant, the rate of price appreciation is slowing. January’s figures represent a 1.2% increase compared to December, marking the tenth consecutive month of moderation in price rises. This suggests a potential leveling off, though prices remain firmly on an upward trend.
The primary driver behind the sustained price increases is a persistent imbalance between supply, and demand. “The increase is mainly due to the tight housing market,” explained CBS economist Marjolijn Jaarsma. “Demand is high and supply is limited, and that trend is continuing. We see it nationwide.” This shortage is compounded by a lack of new construction, with only nearly 80,000 homes completed last year, falling short of the government’s target of 100,000 annually for the third year in a row.
The limited supply is not solely a construction issue. Landlords are increasingly choosing to sell properties rather than rent them out, further constricting the available housing stock. Rabobank analysts noted in a December 17, 2025 report that this increase in supply from landlords selling properties is contributing to the slowdown in price growth, but it is not enough to offset the overall demand.
Despite the challenges in increasing housing supply, demand remains robust, fueled by rising household incomes and favorable mortgage conditions. ABN Amro economist Jan-Paul van de Kerke highlighted this dynamic, stating that households have more disposable income, enabling them to secure larger mortgages and further driving up demand. This dynamic creates a reinforcing cycle, where increased demand pushes prices higher, making homeownership less accessible.
The current market conditions are placing a strain on affordability. Recent analysis indicates that a significantly higher salary is now required to qualify for a mortgage. This escalating cost of homeownership is a growing concern, particularly for first-time buyers and those with lower incomes.
The broader European housing market shares similar characteristics, according to a report from ABN AMRO. While Dutch house prices have increased substantially over the past two decades, the deterioration in affordability is not exceptional when compared to other EU countries. This suggests that the challenges facing the Dutch housing market are part of a wider European trend.
KBRA’s research, published in August 2025, indicated that Dutch house prices had already reached record highs, defying expectations of a slowdown following post-pandemic surges and subsequent interest rate increases. This resilience suggests underlying strength in the market, despite the headwinds of higher borrowing costs.
The Dutch government’s efforts to address the housing shortage have so far proven insufficient. The shortfall in new construction is a critical issue, and achieving the target of 100,000 new homes per year will require significant investment and streamlining of the building process. Without a substantial increase in supply, the upward pressure on house prices is likely to persist.
The current situation presents a complex challenge for policymakers. Balancing the need to increase housing supply with concerns about affordability and sustainable urban development requires a multifaceted approach. Further measures to incentivize new construction, regulate short-term rentals, and support first-time buyers may be necessary to stabilize the market and ensure access to affordable housing for all.
Looking ahead, the trajectory of Dutch house prices will depend on a number of factors, including the pace of new construction, the level of household income, and the direction of interest rates. While the rate of price growth is moderating, the underlying shortage of homes suggests that prices are unlikely to fall significantly in the near term. The market remains sensitive to changes in these key variables, and continued monitoring will be essential to assess the long-term outlook.
