Dutch house prices continue to fall

Prices of existing owner-occupied houses in The Netherlands were on average 1.5 percent lower in February 2011 than in February 2010.

According to the price index of existing residential property – a joint publication by Statistics Netherlands (CBS) and the Land Registry Office – house prices dropped more substantially in February than in January, when they were 1.1 percent down on one year previously.

All types of dwellings were cheaper in February 2011 than in February 2010. Prices of detached houses dropped most (3.4 percent). Corner houses and flats showed the smallest price decrease (0.8 percent).

Prices fell in all provinces except in Groningen and North Holland. With 3.4 percent, residential property prices declined most in Friesland and North Brabant. Prices were 1 percent up on February 2010 in Groningen; they remained stable in North Holland.

Prices of existing residential property also fell relative to January 2011. With 0.2 percent, the price drop was exactly the same as in the two preceding months.

Nearly 10 thousand existing houses changed hands in February, i.e. an increase by nearly 8 percent relative to February 2010. February was the second month in a row, in which house sales were up on one year previously.

Today the Dutch banks, the Financial Markets Authority and the Ministry of Finance have reached an agreement on new rules for top mortgages.

Under the new arrangements, the mortgage when buying a house may not exceed 110 percent of the purchase amount. Also up to half the mortgage value may be redemption-free.

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