6.2

Housing Market Indicator

overall score, actual per Q3 2020

Housing Market Indicator

The Housing Market Indicator of Q3 2020 dropped significantly to 6.2, from 7.0 in Q2. The effects of the Covid-19 pandemic became clearly visible this quarter.

The COVID-19 pandemic is a shock of unprecedented intensity and severity. The challenges facing all parts of the economy in dealing with the economic, humanitarian and social consequences of this crisis are historic. Although there is a huge amount of uncertainty on the exact (economic) impact, the economic effects in the first half of 2020 were very serious. And the effects will presumably reach far beyond the current year. There will be a delayed impact in the form of unemployment and bankruptcies. In what way, the changes to our economy induced by the pandemic are not only temporary, but structural, is hard to say. This will crucially depend on the effect of the economic policies implemented in response to the coronavirus pandemic and the duration of the pandemic.

The current impact on the Dutch economy mainly caused the decrease of the HMI. GDP declined massively (data of Q3 on GDP growth was not available), inflation is low, unemployment is rising and consumer confidence remains well below zero.

The impact on the Dutch housing market is much less dramatic than the impact on the economy, so far. House prices are still increasing and the transaction rate is still high. The rental market is also still in good shape, despite a slight increase in vacancy in the high-end segment. Strong demand, limited supply and low interest rates seems to lay a firm foundation.