Rising housing prices in The Netherlands during Covid-19: why now?
All over the world, housing prices have been overgrowing. According to the Central Bureau of Statistics (CBS), the average housing price in The Netherlands grew by 7.2 percent in 2019. By the first quarter of 2021, this price has grown by a shocking 14.7 percent. This is the most significant rise in 20 years. Prices are increasing for a while now, but how did the coronavirus contribute to the acceleration of this process?
The sudden rise came quite unexpectedly for Peter Hein van Willingen, the head of economics of the CBS. He explains that due to the notorious corona pandemic, the country went into recession. This usually means that people buy less and watch their expenses a bit more. However, because of the lockdown, people could not spend their money on restaurants, vacations and theatres, and it seems like people used that money to save up and buy a house.
Furthermore, everyone has been working from home a lot more. This could also add to the fact that people would instead buy a new house now, as they are at home a lot and possibly have more time to make it feel like a home, rather than waiting to buy a new house, when one has to be physically present at work.
All these reasons for the upsurge in the housing market during this pandemic do not mean that the prices will drop when the lockdown is over. As said before, the housing market has been growing for years now, and it is expected for the market to continue this growth.
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