New Home Sales Drop as Prices Soar – Northern Times

New home sales in the fourth quarter of 2022 fell dramatically as higher prices pushed some buyers away from the housing market.

According to one study, sales of newly built apartments and family homes in northern states are down about 50% compared to a year ago. report From CBS Census Bureau.

Real estate sales plummeted nationwide. “There are small regional differences, but the situation in Drenthe, Groningen and Friesland is in line with the general trend,” says Arjan Lamberin of Lamberink Nieuwbouwmakelaars, which has branches in all three states. quoted As Dagblad van het Noorden said.

About 5,300 new homes were sold in the fourth quarter of 2022, up from about 10,700 in the previous year. Meanwhile, the average price of new homes he rose to €468,000, up 6.1% from a year ago. Prices also rose from the median of the previous year.

More than 25,000 new homes will be sold in 2022. This number falls far short of the 90,000 homes Hugo de Jonge, Minister for Housing and Spatial Planning, has promised he will build every year until 2030. Spokesperson for his NVM broker in Groningen. De Jonge’s objectives in the “housing agreement” with the state are too ambitious, he believes. Given that it is slow, it will never succeed, ”he predicts.

New home sales took a hit last year, hurt by higher mortgage rates, which are currently hovering around 4.5%. “Gone are the days when borrowing money didn’t cost you anything. It costs a little more now, but the difference between nothing and little makes prospects cautious,” says Drenthe’s Wim Stuursma, spokesperson for NVM Brokers.

With both inventory and new home prices remaining high, lower mortgage rates and prices could trigger a buying rush, but until that happens, older homes remain a more attractive purchase for buyers. It will be an option. On average, a new home costs €75,000 more than an existing home, says De Jong. “The price difference between old and new buildings is too large. Sales of existing homes have not slowed down. Prices have fallen slightly, but not new homes.”

Real estate experts say this is all happening at a time when demographic demand for new built-for-sale homes remains strong. Many households would like to have more space and may find themselves in less than ideal housing situations. But higher interest rates mean higher monthly payments for prospective buyers, who may be forced to sit on the sidelines until prices drop.