7/3/2023 0 Comments Housing bubble 2021![]() ![]() The carry-over effect thus explains more than half of the house price increase we expect next year. Even if house prices from November onwards were to remain at the same level as in October, 2022 would see year-on-year growth of 6.3 percent. Due to the high price increases in 2021, prices are currently much higher than at the beginning of 2021. The substantial price growth expected in 2022 is also due to the so-called carry-over effect. In this quarterly report, we estimate for the first time the price increase for 2023, a year in which we expect house prices to rise by only 3.2 percent. Next year, we expect another 12.4 percent increase. This year, we expect the average purchase price of a house in the Netherlands to increase by 14.9 percent. As capital market rates will not fall any further, price growth will gradually level off. House prices have already risen substantially in recent years, partly due to declining interest rates. Mortgage interest rates are driven to a large extent by capital market rates. The expectation is that capital market rates will remain at about the same level as this year. Although the year-on-year rise will remain high next year, we expect growth to become more modest at the beginning of next year as the economy is expected to grow less exuberantly and unemployment will likely rise somewhat. At 18.3 percent, year-on-year price growth in October was slightly lower than in September (18.5 percent) and we expect this trend to continue. We believe that the peak in price growth has now been reached. The average house sold in the third quarter was more than 61,000 euros more expensive than in the same period last year. At that time, however, price levels were considerably lower than they are today, making nominal price growth in euros an absolute record. Only at the turn of the century was there similar growth in house prices ( see Figure 1). Year-on-year house price growth has been increasing for seven quarters in a row now. And nothing much changed in the autumn of 2021: in the third quarter, houses sold were 17.5 percent more expensive on average than in the same quarter of the previous year. CNN Sans ™ & © 2016 Cable News Network.Over the past one and a half years, houses have rapidly become more expensive in the Netherlands. Market holidays and trading hours provided by Copp Clark Limited. All content of the Dow Jones branded indices Copyright S&P Dow Jones Indices LLC and/or its affiliates. Standard & Poor’s and S&P are registered trademarks of Standard & Poor’s Financial Services LLC and Dow Jones is a registered trademark of Dow Jones Trademark Holdings LLC. ![]() Dow Jones: The Dow Jones branded indices are proprietary to and are calculated, distributed and marketed by DJI Opco, a subsidiary of S&P Dow Jones Indices LLC and have been licensed for use to S&P Opco, LLC and CNN. Chicago Mercantile: Certain market data is the property of Chicago Mercantile Exchange Inc. ![]() US market indices are shown in real time, except for the S&P 500 which is refreshed every two minutes. Your CNN account Log in to your CNN account “It’s too soon to call whether it is or not.” “This has to be monitored very closely,” Citigroup Morgan Stanley CEO James Gorman said while housing is not in a bubble nationally, some markets “look very frothy.” (GS) CEO David Solomon said he doesn’t see a bubble, though he urged the Federal Reserve to “get the right balance” in policy to keep booming asset prices in check. We have enough capital to withstand multiple crises,” he said. Dimon was the only big bank CEO to outright say there is a bubble, but he stressed the financial system is better positioned this time because banks have stocked up on loss-absorbing capital. His comments came in response to a question from Senator Jon Tester asking if there is a housing bubble. (Photo by Saul Loeb/AFP/Getty Images) Saul Loeb/AFP/Getty Images The US real estate market is booming even as the coronavirus crisis intensifies, and the seemingly insatiable appetite for new and older homes has sent prices soaring - meaning more and more families with modest incomes are seeing their dreams of owning property shattered. A house's real estate for sale sign is seen in front of a home in Arlington, Virginia, November 19, 2020. ![]()
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