Housing market cools: house prices set to rise by 3 percent in 2026

• After a strong year in 2025, a moderate price increase is expected in 2026

• Impact of rising interest rates balanced by income growth and housing shortage

• Number of transactions set to fall in both 2026 (–3 percent) and 2027 (–4 percent)

House prices set to rise by 3 percent in 2026 and 4 percent in 2027

After a strong 2025, the housing market is expected to cool in 2026. One indication of this is that price increases have recently been stronger in rural areas than in cities. In addition, rising mortgage rates are dampening housing demand this year, with the ECB expected to implement deposit rate increases by 25 basis points, possibly twice. Against a backdrop of growing uncertainty about the economic consequences of the war in the Middle East, inflation is higher due to sharply rising energy prices. Despite these uncertainties, ABN AMRO is keeping its price forecast for 2026 (+3 percent) and 2027 (+4 percent) unchanged. Upward and downward forces are expected to largely offset each other. On the one hand, rising interest rates and growing uncertainty are curbing demand. On the other, real income growth in 2025 and the housing shortage are having a net upward effect on house prices. Homebuyers who are currently holding back may also make an effort to catch up in 2027 if the economic situation stabilises. ABN AMRO reaches this conclusion in the latest edition of the Housing Market Monitor, published today.

Number of transactions to fall in both 2026 and 2027

The number of housing transactions will remain under pressure in both 2026 and the year ahead. This has led ABN AMRO to revise its forecast for 2026 downwards, from –1 to –3 percent. Many sellers are holding on to their homes until the desired asking price is achieved, while the limited number of newly built homes is hampering market mobility. The sale of former rental homes will continue in the first half of this year, but this effect is likely to fade after the summer. ABN AMRO therefore expects a further decline in the number of transactions in 2027 (–4 percent).

No significant growth in housing supply in sight

The outlook on the supply side is also unfavourable. In the first quarter of 2026, the number of new homes was 7.6 percent lower than in the same period last year. Given the strong correlation between the start of the year and the annual total, ABN AMRO does not expect any significant growth this year. “Although we see an increase in the number of building permits issued, there are many bottlenecks in the implementation phase, such as planning processes and limited construction capacity. Interest from private and institutional investors is also declining, which is putting pressure on financing for new-build projects,” says Mike Langen, Senior Housing Market Economist at ABN AMRO. “While economic uncertainty combined with rising interest rates is causing the housing market to cool, the structural housing shortage remains. That is why we expect house prices to rise slightly this year as well, and access to the housing market to remain under pressure.”