Rabobank expects dip in housing market in 2021 and 2022

Rabobank anticipates a dip in the housing market over the next two years. Unemployment will rise as a result of the corona crisis and demand for houses will fall as a result, the bank writes in its Quarterly Report on the Housing Market.

According to the calculations, house prices in 2021 will be 0.8 percent lower on average than this year. In 2022 there will be another 2.6 percent drop on top of that. Rabobank believes that house prices will rise again in the course of that year.

Support packages

The dip will come later than Rabobank first expected. In the previous quarterly report, the start of the dip was already anticipated in the last quarter of 2020. The fact that it will take longer is probably due to the government’s corona support packages. At least among potential homebuyers (over the age of 25), these packages still keep employment levels at a reasonable level.

As a result, the housing market is still in full swing at the moment. Up to and including July, house prices had risen by an average 7.1 percent relative to twelve months previously. The number of sales was 6.7 percent higher.

But in the end, many people will lose their jobs or at least be afraid of them, the bank thinks. Investors will also become more reluctant. As a result, house sales will fall from 220,000 this year to 190,000 next year.

Starters strike

Rabobank points out that a relatively large number of first-time buyers (aged 25 to 35) are buying a house this year. This may be due to the fact that newcomers are more likely to become reluctant when economic conditions are less favourable, for example because they also have a house to sell. Investors are also becoming cautious, allowing starters to seize their opportunity.

The increasing proportion of young buyers may therefore be a sign of an impending dip, Rabobank concludes. Also around 2008, at the start of years of crisis in the housing market as a result of the credit crisis, it was noticeable that a remarkably large number of first-time buyers were buying a house.