The median house price rose by 7.2% in just three months this year, according to sales reported by estate agents in the NVM association.

In its quarterly market update published on Thursday, the association said that this kind of rise has only happened once since 1995. Its figures – which do not represent all sales – show that its agents’ median house sale was for €468,000 between April and June, €34,000 more than between January and March.

According to the national statistics office CBS, after a brief correction in 2023, overall Dutch house prices have reached their highest ever average price of €445,430, when their quality is taken into account.

The NVM said in its report that the Dutch housing market was “in flight”, driven by a scarcity of supply and more sales of expensive homes in pricey areas.

Some estate agents believe that house sales will collapse over the summer months, said the NVM, but “nobody expects a drop in prices”. The number of sales is still low in a historic context.

Rental law means more sale homes

However, it reports that more houses are already coming onto the market to reduce shortages in houses for sale, with a new rental law bringing in price controls for 300,000 more apartments.

According to research by the NVM’s technical wing Brainbay, houses that have moved from rentals to the sale market are typically smaller apartments from 50 to 80 square metres, but not lower quality homes.

It attributes some of the price rise to salary increases. In 2023, the former housing minister Hugo de Jonge increased the amount that people could borrow, taking into account the full salary of both partners. Dutch households can borrow 100% of a house price and have a set of tax breaks to promote home ownership which many countries have abolished due to fears about “market distortion” and pumping prices.

The Netherland needs to build almost a million homes by 2030.

Financial risk

In a financial stability assessment in March, the IMF’s first recommendation was that the Dutch should phase out mortgage interest relief tax and reduce the amount people can borrow.

In June, the DNB Dutch central bank said a price correction in property and “overvaluation due to rising house prices” was one of the country’s most significant risks for financial stability.

Housing was one of the key issues reported by voters before the last election, and some research indicates that young people are unable to start a family in areas where house prices are highest.