To read this content please select one of the options below:

Assessing Dutch housing cycle and near-term market prospects

Arvydas Jadevicius (Independent Researcher, Amsterdam, the Netherlands)
Peter van Gool (Amsterdam School of Real Estate (ASRE), Amsterdam, the Netherlands)

Journal of European Real Estate Research

ISSN: 1753-9269

Article publication date: 8 July 2020

Issue publication date: 23 July 2020

229

Abstract

Purpose

This study is a practice undertaking examining three main concerns that currently dominate Dutch housing market debate: how long is the cycle, will the current house price inflation continue and is housing market in a bubble. With national house prices reaching record highs across all major cities, future market prospects became a topic of significant debate among policymakers, investors and the populace.

Design/methodology/approach

A triangulation of well-established academic methods is used to perform investigation. The models include Hodrick-Prescott (HP) filter, volatility autoregressive conditional heteroskedasticity (ARCH approximation) and right tail augmented Dickey–Fuller (Rtadf) test (bubble screening technique).

Findings

Interestingly, over the years from 1985 to 2019 research period, filtering extracts only one Dutch national housing cycle. This is a somewhat distinct characteristic compared to other advanced Western economies (inter alia the UK and the USA) where markets tend to experience 8- to 10-year gyrations. Volatility and Rtadf test suggest that current house prices in most Dutch cities are in excess of historical averages and statistical thresholds. House price levels in Almere, Amsterdam, The Hague, Groningen, Rotterdam and Utrecht are of particular concern.

Originality/value

Retail investors should therefore be cautious as they are entering the market at the time of elevated housing values. For institutional investors, those investing in long-term, housing in key Dutch metropolitan areas, even if values decline, is still an attractive investment conduit.

Keywords

Acknowledgements

The authors would like to thank anonymous reviewers for their editorial that greatly improved this manuscript.

Disclaimer: This manuscript was prepared by the authors in their personal capacity. All views and opinions expressed in this manuscript are those of the authors and should not be regarded as representing the views or opinions of institutions they represents.

Citation

Jadevicius, A. and van Gool, P. (2020), "Assessing Dutch housing cycle and near-term market prospects", Journal of European Real Estate Research, Vol. 13 No. 2, pp. 257-270. https://doi.org/10.1108/JERER-07-2019-0020

Publisher

:

Emerald Publishing Limited

Copyright © 2020, Emerald Publishing Limited

Related articles