Recently, Matthijs Korevaar, Assistant Professor in Finance, Real Estate and Economic History at Erasmus School of Economics, appeared in a broadcast of the Dutch podcast Toegevoegde Waarde. There, Korevaar addressed whether there is a right time to buy a house.
In the housing market, many factors such as mortgage interest deduction, lending standards and interest rates determine the price of a house. Supply also has an effect on house prices, but only in the long term. Supply and demand therefore play a smaller role in the housing market than in other markets. A good example of this is the 2008 crisis, where demand for houses plummeted while there were no fewer households.
Overall, there are many fluctuations in the housing market. The saying that your house necessarily increases in value over the years is therefore untrue, Korevaar said. One connection that does recur often is that house prices rise when interest rates are low. This is because in that case it is very attractive for investors to acquire real estate, the university lecturer says.
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You can listen to the full episode from Toegevoegde Waarde, 30 September 2023, here.
