What can we expect from the housing market in 2024? What's the forecast? We started 2023 in bed with flu in Antwerp. Interest rates were high, consumer confidence was low and the market was flat on its back. Exciting! Would the market pick up? Would the market find a balance? I started drawing interiors for homes that were for sale, to make them extra attractive. I gathered all the figures together to see whether I could predict anything. But that was so hard. Inflation was high, interest rates were high. But demand for homes was also enormously high. Supply was limited. But did people dare to buy a house?
Contents
- What will mortgage rates do?
- Is the housing market really cooling down?
- Overbidding on a house?
- Will house prices rise or fall?
- What's the housing market like in Utrecht?
- Why are houses so expensive?
- What will change in 2024?
- Conclusion of the housing market forecast 2024
I dived into the figures and wrote several blogs.
What will mortgage rates do?
In March 2023 I wrote a blog about mortgage rates. At the start of the year, the rate was around 4.5% for 100%, 10-year fixed. For about 4 months the rate stood at 4.85%, and in recent months it rose to 5.25%. Today the Rabobank basic rate fell to 5.05%. Many clients were happy that they'd managed to secure a house and that rates had fallen slightly again. But will it stay that way? We don't know, of course. Unfortunately we don't have a crystal ball, so it remains difficult to say anything about it.
Is the housing market really cooling down?
In March 2023 I also wrote a blog about the housing market cooling down. Prices in the Utrecht region had just fallen by 12.7%. But we also noticed, very slightly, that it was getting busier again. I ended the blog by saying that I thought the market was going to stabilise. And it did. For 1.5 months, but after that we really did see a rise again.
Overbidding on a house?
In April I wrote a blog about overbidding on a house. At the end of 2022 and the beginning of 2023, buyers were once again bidding well below the asking price. But from April the market started to pick up again. So far this year, 3,145 houses have been sold. The average selling price was €425,000. On average, buyers bid 1.1% above the initial asking price. It typically took 25 days for houses to sell, with 42% of sales involving a buying agent. At Gusto Casa, we sold at an average of 3.1% above the asking price this year.
Will house prices rise or fall?
In June I wrote the blog: Will house prices rise or fall? We got this question a lot. The news kept saying non-stop that house prices were falling. But if you wanted to book a viewing in Utrecht, you heard that the viewing days were already fully booked. Viewers were confused. Should they buy or not? Were prices going to fall or rise? The conclusion from 2022 was as follows:
‘I would buy a home myself. You pay off a good chunk of the loan. At the moment the housing shortage is still growing. Once inflation drops a little, construction costs stabilise and interest rates fall a bit again, we'll have a problem on the housing market that I have no idea how to solve. If you enter the housing market now, at least you can build something up. For the first few years, don't see your home as a property investment with a return, but simply as a nice house you're going to live in. Don't compare yourself with friends who gained €100,000 in equity in 1 or 2 years last year, but look for a house that suits you and where you can stay for a while.
In a few years you'll be grateful you bought. Because in 8 years the problems on the housing market will be out of control. Interest rates will then fall a bit again and demand will be greater than ever!’
I see first-time buyers wanting a dream home straight away. It has to be a Pinterest picture right away. Perfectly good kitchens and bathrooms are ripped out, new floors laid and walls smoothly plastered. New furniture is bought, but people also want to keep travelling, wear nice clothes and eat out. It's much more important to get onto the market than to buy your dream home straight away. Buy a house where you feel at home. See it as a multi-year plan. A stepping stone to a possible dream home. Allow yourself your own journey to a dream home. It doesn't have to be perfect in one go. But build and work towards your dream home, and it will all work out.
I too started with a small ground-floor flat without heating, where I had to shower in a cupboard. But I was happy there and super proud of it. It's a complicated market. Relatively speaking, we live in homes that are too big. We have too little space and building new is currently too expensive. That's making it harder and harder to get onto the housing market.
What's the housing market like in Utrecht?
On our holiday, that was a question we got a lot from fellow water sports enthusiasts. Everyone was curious. It's a favourite topic anyway. Everyone needs somewhere to live, so everyone is affected by it in some way and has an opinion about it. Prices had fallen sharply. But prices were also rising quickly again. Here we mapped out supply and demand. In August prices were still just slightly lower than the year before. But we're already seeing some prices rise above the market's previous peak.
Why are houses so expensive?
In October I wrote a blog about the reasons behind high house prices. Everyone wants cheap housing. Everyone wants enough space and everyone wants a beautiful house. But unfortunately not all these wishes go together. My conclusion was:
‘If you want to solve the housing problem, the government will have to start building homes again like in the 1980s, or provide subsidies to housing associations, cooperatives and developers. That's the only way enough homes can be built.’
I'm very curious what will happen with the new cabinet. The PVV has a lot of left-wing plans in which all homes have to be very affordable. In which lots of social rented homes are built and in which the mid-rent regulation stays in place. My blog shows that this is a practically impossible solution. The money has to come from somewhere. We already see many investors investing abroad. If businesses are driven away as well, I really fear the worst… I know the PVV thinks that if we only grant homes to ‘our’ own people, we'll need far fewer of them. But that's not the solution… I can't imagine his radical ideas not being blocked by other parties.
What will change in 2024?
In 2023 the market was erratic. From a low point back to a high point. Many changes are planned when it comes to buying a home. What's the forecast for the housing market?
Maximum mortgage depends on the energy label
From 2024, the maximum mortgage will be partly determined by the energy label of the home being purchased. A favourable energy label leads to a higher borrowing capacity without additional conditions. Homes with energy label C and D qualify for an extra loan amount of €5,000, while for labels A and B the amount rises to €10,000. For extremely sustainable homes with an A++++ label and an energy performance guarantee of at least ten years, the extra loan amount can even rise to €50,000.
Even when buying a home with a less favourable energy label, it will be possible to borrow extra money next year, provided it's spent on making the home more sustainable. The extra loan amount varies depending on the current energy label. For homes with label A and B it's €10,000, rising to €15,000 for labels C and D, and €20,000 for labels E, F and G. Homes without an energy label qualify for a maximum of €10,000 extra for sustainability improvements. Calculate here how much you can borrow in 2024.
Single people can borrow more
Single people with an income of at least €28,000 will be able to borrow €16,000 extra in the coming year. This extra borrowing capacity gives single people more financial flexibility when buying a home.
Change to the NHG limit
Changes to the Nationale Hypotheekgarantie (NHG, the National Mortgage Guarantee) in 2024 allow home buyers to borrow up to €435,000, up from €405,000 in 2023. For sustainability purposes, the limit next year is €461,100.
Mortgages and your student debt
If you have a student debt, you can borrow less than without one. We knew that already. Until now, the original student debt was taken into account. From 2024, the bank will use the actual amount paid each month for the calculation.
Transfer tax
Buyers under 35 who will live in the home they buy themselves are again exempt from transfer tax in 2024, provided the home costs no more than €510,000. This is a considerable increase compared with the amount in 2023 (€440,000). Buyers over 35, or those who have already used the scheme, pay 2% transfer tax. If the home is not owner-occupied but, for example, let out, the rate is 10.4%.
Mortgage interest deduction
The maximum mortgage interest deduction hardly changes in 2024. It rises from 36.93% to 36.97%. You're entitled to interest deduction when repaying with a linear or annuity mortgage. Transitional rules apply to mortgage types taken out before 1 January 2013, under which the interest paid is deductible for a maximum of 30 years.
Conclusion of the housing market forecast 2024
What's the forecast for the housing market in 2024? All these measures are aimed at creating more opportunities to borrow more money. In a market with more demand than supply, borrowing more money means prices will rise. The relaxations will cause prices to rise. In recent months we've already seen homes that were stuck at around €440,000 suddenly selling well above that price again. After all, it suddenly saved buyers the transfer tax. We also have a great many handovers scheduled for January. We're also seeing interest rates very slowly falling a little. This means costs are slightly lower again. I suspect it will become even harder to rent a house in the coming year, that investors will sell their small homes and that next year we'll be even worse off. The jubelton (the tax-free gift towards buying a home) also has to be used before the end of the year. I expect this will give an extra boost to ‘starter’ homes.
Want to buy a house? Then take a look at our listings. Or would you rather sell your house? Great, we'd love to come round!
