Today, CBS (Statistics Netherlands) announced a y-o-y house prices drop, for the first time in decades. We have seen house prices drop around the globe, especially in the UK and the USA, but also in China. We have seen sales slowing down, foreclosure sales, or no sales at all. We have seen house prices coming down by 10%, 20%, 30%, in some submarkets even more. So, expectations were high. Especially amongst homeowners, obviously.
Prices of existing houses sold in February 2009 were on average 0.5 percent lower than twelve months previously. This is the first reduction since house prices are monitored on a regular basis (January 1995). In the course of 2008, prices of residential property already began to slow down, as is shown by the price index of existing houses, a collective publication by Statistics Netherlands and the Land Registry Office.  The most substantial price reduction was recorded in Friesland, where prices were over 4 percent down on one year previously.
Ok, so prices are down. By half a percent. Zero point five percent! On average. And the most substantial reduction was recorded in the rural province of Friesland. No less than 4% reduction.
Well, I must admit, this is almost a disappointment. What did I expect? A price reduction of some 5% y-o-y on average. At least. Look at the graph above, for the 2005-2009 period: prices went up by 4-5% in the years 2005, 2006, 2007 and some 3% in 2008. And that is even a low price growhth rate, compared to the 1996-2002 period:
Look at this graph (same source: CBS): a wild guess tells me that Dutch prices in this 7-year period went up by some 10% y-o-y on average.
When an unprecedented global crisis kicks in, after such a housing boom, that lasted for at least 12 years, I am indeed expecting a bust with a bit more a substance. At least more than a decrease of just 0.5%. In my opinin, the conclusion should therefore be: the re-pricing of houses in the Netherlands has not really begun, yet.