Geopolitical tensions: what do they mean for the housing market? So incredibly much is happening. But what influence does it have?
Contents
- A world under strain: geopolitics in a nutshell
- Mortgage rates: what is happening right now?
- The Utrecht housing market: what are the figures now?
- Trump’s big plan and what it means
- My expectation: house prices are going to shoot up
- House price forecast for 2025.
- Advice: buy now or wait? This is what we think
- Update March 2026
- Dubai: safe haven or vulnerable property market?
- Oil prices: the macro lever behind inflation and interest rates
- Trump, trade policy and financial uncertainty
- The Netherlands and Utrecht: structural scarcity remains dominant
- What does this mean for buyers and sellers?
- Conclusion
In February 2022 I wrote a blog about the influence of the war in Ukraine on the housing market. Three years later, that article is once again one of the most-read pieces on our site. And that makes sense. Because the world is restless, there are lots of geopolitical tensions, Trump is back in power, and we all want to know: what does this mean for my home, my mortgage, my future?
After the war in Ukraine broke out, energy prices and mortgage rates rose at record speed. And because our housing market runs on interest rates (they simply determine what you can borrow), the market temporarily ground to a halt. But now? We are long past that dip. In Utrecht, prices are well above the level of late 2021. But now, with the bombs in Dubai and rising oil prices? Time to write an update as well. And the question is: what is going to happen now?
A world under strain: geopolitics in a nutshell
Geopolitical tensions: where are they? A quick trip around the world, because that geopolitical unrest affects our economy and our housing market.
- Ukraine – Russia: at war since 2022. More expensive energy, higher inflation, pricey building materials.
- Middle East: tension around Israel, Gaza and Iran is putting pressure on oil prices.
- China – Taiwan: a threat to world trade, shortages of goods.
- US – Trump: back in power, with plans for import tariffs, economic unrest and interest rate cuts.
That unrest? It makes borrowing money more expensive (because of an extra risk premium), slows down construction (because materials and raw materials are harder to get) and makes everyone just that little bit more cautious. Buyers and banks try to factor in their risks.
Mortgage rates: what is happening right now?
Banks are raising mortgage rates. But why? Didn't the ECB just cut rates? It's a risk premium. Geopolitical tension means more risk in lending money. But… and here comes a brainwave of mine: fewer mortgages are being taken out right now. And if nobody borrows, banks earn nothing. The ECB has already cut rates, and I expect banks will follow that example after all. Fewer mortgages means less profit. And the developments in America, I expect those will also affect mortgage rates.
The Utrecht housing market: what are the figures now?
OK, so what do the numbers say?
- Apartments: €6,718 per m² (+15.4% compared with last year)
- Terraced houses: €6,146 per m² (+13.5%)
- Average transaction price: €540,000 (was €482,000 in Feb ’24)
- Number of transactions: +24.4% compared with last year
What stands out: over the past 4 months, prices in Utrecht rose by about 0.2% per month or fell by that same percentage, but before that we saw months of price rises of 2 to as much as 4% per month. The increase was insane. So a little bit of stabilisation is no bad thing. Want to know where the market stands now and how much you need to overbid? We wrote a blog about it: Overbidding in Utrecht 2025
Trump’s big plan and what it means
I'm a bit of an oddball. My mind never stops. So here's a brainwave of mine. I think Trump is deliberately causing unrest to bring interest rates down. He has to refinance $7 trillion of national debt. At a high interest rate, that costs a fortune. What is he going to do? Hike import tariffs, wage trade wars, and then everyone flees to the safety of government bonds. The market crashes, interest rates drop, and then he can refinance his national debt cheaply.
If US interest rates fall, Europe follows. In the Netherlands, we are extremely dependent on the level of mortgage rates. We are one of the few countries where you can borrow 100% of the home's value. So a lower rate means more borrowing, which means the rate rises.
But in the meantime, building materials are also getting more expensive. Those import tariffs push up the price of raw materials and the cost of materials. Rents and new-build prices are not allowed to rise because of legislation. The result? Nothing gets built. The shortage grows and prices rise even faster. Oh yes, and the European economy is getting stronger. So more investment in Europe.
My expectation: house prices are going to shoot up
What do I think? Prices will shoot up. Because there's less supply, lower mortgage rates, a labour market that is still tight and no new construction. The scarcity will then be even worse than it already is. My expectation? If Trump succeeds in his plan, within 12 to 18 months we will be back to price rises of 3 to 4% per month. Just like in 2021 and just like a few months ago. So brace yourself. Of course, I could also be completely wrong. So don't take this as financial advice.
House price forecast for 2025.
De Nederlandsche Bank (the Dutch central bank) expects a rise of 7.5% for 2025 and 4% in 2026. But in Utrecht? Probably more. The market is tight, building is costly and soon (I think) borrowing will become cheaper again. I expect we will then go back to a rise of 25% a year instead of the 15% we have now. So check with your financial adviser what the smart move is. Fixing your rate for a shorter period. Or, on the contrary, for longer. And if prices rise sharply, it can be smart to have your home valued again and get the risk premium taken off your interest rate.
Advice: buy now or wait? This is what we think
With all these geopolitical tensions, should we buy or wait and see? When I wrote in 2022 that house prices would keep rising despite everything, many people thought that sounded unlikely. Yet that is how it turned out – prices fell, but monthly payments rose faster because of the interest rate. So it felt like a kind of rise in house prices. Only in absolute terms, the value of homes had fallen. I said I didn't expect a direct rise in transaction prices. But that it would still be a kind of price rise. And I was proved right. Now I dare to say it again: I expect a significant price rise next year, despite, or perhaps precisely because of, all the geopolitical unrest. Maybe not straight away, but if interest rates fall and building becomes even harder, things could move fast. Very fast.
Update March 2026
In recent months, several shocks have come together at once. Escalation in the Middle East, attacks in the United Arab Emirates, rising oil prices and political tensions around Donald Trump's trade policy are creating new uncertainty on financial markets. A partner of ours in Spain has been in Dubai the whole time. She feels surprisingly safe. Which shows us straight away what the news does to how we perceive things here. Suddenly this blog is being read an enormous amount again.
Even so, recent figures show that the housing market does not automatically collapse because of geopolitics. In the Netherlands, house prices keep rising, while new tensions are emerging in international property markets. In fact, the figures lag behind a little and there seems to be a slight fall. But the number of viewings and prices are now rising rapidly.
So the question is not only what happens geopolitically, but above all how that feeds through the economy and interest rates into the housing market.
Dubai: safe haven or vulnerable property market?
In recent years, Dubai's property market was known as an international safe haven. Wealthy investors from Europe, Russia and Asia bought property in the city on a massive scale.
Until early 2026, prices kept rising strongly. According to the Dubai Residential ValuStrat Price Index, residential prices in January 2026 were about 17.9 percent higher than a year earlier. Villas in particular rose sharply in value.
That growth was supported by a number of factors. International migration of wealthy households, favourable tax rules and a large role for foreign buyers created strong demand for property.
But in early March, the situation changed abruptly. Missile and drone attacks hit parts of the United Arab Emirates, and locations around Dubai were struck too. With that, the region's reputation as a stable investment haven was suddenly put to the test. But people there do feel safe. Not everyone, and certainly not the people who stayed in a shelter. But overall, it felt fine.
The first reaction of financial markets was visible among listed developers. Property companies such as Emaar Properties and Aldar Properties lost about five percent of their market value in a single trading day. But that says nothing about the value of the property itself.
Even more important is the effect on financing. In Dubai, a large share of home sales consists of so-called off-plan projects. These are homes that are sold before they have been built. In 2025, about 65 percent of transactions were this type of sale.
When geopolitical risks rise, investors become more cautious and financing via bond markets can become more expensive. That hits precisely this model. So will the air go out of the bubble?
At the same time, there is no clear fall in prices visible yet on Dubai's property market itself. Property prices often react with a delay. So the tension for the coming period lies between strong fundamental demand and a higher geopolitical risk premium. Or will people there perhaps feel very safe after all, because all sorts of things are being shot out of the sky, and will prices then rise?
Oil prices: the macro lever behind inflation and interest rates
The biggest influence of geopolitical conflicts on housing markets usually runs through energy prices.
When conflicts escalate in regions that produce a lot of oil and gas, the risk premium on energy rises. That happened again in early March, when markets were bracing for disruption around the Strait of Hormuz.
The economic transmission usually follows a fixed chain. Higher oil prices increase transport and energy costs. That leads to higher inflation and inflation expectations. Central banks respond by postponing rate cuts or keeping rates high for longer.
The final step is visible in the housing market. Mortgage rates move with capital market rates and determine how much households can borrow.
That effect is directly visible in international figures. In the United States, the average thirty-year mortgage rate was around six percent in early March 2026, according to figures from Freddie Mac.
The US central bank, the Federal Reserve, is keeping its policy rate at around 3.5 to 3.75 percent while closely monitoring inflation and energy prices.
This mechanism is at play in Europe too. In early February 2026, the European Central Bank kept its deposit rate at 2 percent.
In the Netherlands, mortgage rates on new loans are around 3.5 percent, according to European banking statistics.
As long as inflation stays around two percent, there is room for stable or slowly falling interest rates. But new energy shocks can quickly change that.
Trump, trade policy and financial uncertainty
Besides war and energy, geopolitical policy also plays a role. Donald Trump's trade policy regularly creates uncertainty on international markets.
New import tariffs, sanctions and discussions about trade relations can affect world trade and investment.
For Europe, that effect usually works indirectly. Higher tariffs can raise import prices and thereby drive up construction costs. Steel, technology and transport become more expensive. That can delay new-build projects or make them more expensive.
In addition, financial markets react to uncertainty. When investors judge risks to be higher, risk premiums on capital markets rise. That feeds through into financing costs for banks and ultimately into mortgage rates.
For local housing markets such as Utrecht's, this means that international politics does not directly determine house prices, but it does shape the economic environment in which those prices are set.
The Netherlands and Utrecht: structural scarcity remains dominant
Despite all the geopolitical developments, the Dutch housing market continues to be determined mainly by domestic factors.
According to figures from Statistics Netherlands (CBS) and the Kadaster (the Land Registry), house prices in January 2026 were about 5.4 percent higher than a year earlier.
Inflation was around 2.4 percent in February.
For the province of Utrecht, pressure on the housing market remains exceptionally high. The region combines strong economic growth with limited room for new construction. As a result, supply remains structurally smaller than demand.
That means international shocks usually don't lead to immediate price falls. Instead, they mainly affect the speed of transactions and affordability via mortgage rates.
What does this mean for buyers and sellers?
For homebuyers, geopolitical uncertainty mainly means that interest rate developments remain crucial. When energy prices rise and central banks stay cautious, borrowing capacity can remain limited.
For sellers, the structural scarcity in the Netherlands remains an important support for prices. Even when transactions temporarily slow down due to uncertainty on financial markets, demand for homes remains high.
That is why the Dutch housing market usually reacts more slowly and less extremely to geopolitical events than international financial markets.
Conclusion
The housing market is never separate from geopolitics. War, energy prices and trade policy ultimately feed through, via inflation and interest rates, into how affordable homes are.
Even so, recent developments show that property markets are often resilient.
In Dubai, its safe-haven status is currently being tested by direct security risks. In the Netherlands, however, the most important factor remains the structural housing shortage.
As long as that shortage remains large and mortgage rates stay relatively stable, the Dutch housing market is likely to remain less volatile than the geopolitical headlines suggest.
Get good advice about your options and the interest rate. Because waiting for a little dip? In Utrecht, with sky-high demand and a tight labour market, that could mean you just end up needing even more of your own money. And if I really could predict everything? Well, then I'd be sitting on a tropical island instead of writing these blogs 😉.
Looking for a home? View our listings.
