Housing market in the Netherlands
Housing market in the Netherlands
Should you buy a house on the Dutch housing market in 2020?To 'expat mortgages'
Many expats buy a house in the Netherlands to improve their living comfort and save on expensive rental costs. Are you considering purchasing your own property too? Then you’ve probably already heard that the Dutch real estate market is tight and house prices are high. Home ownership is hot in Holland! What’s going on exactly on the housing market in the Netherlands of 2020? Should you buy a home, or should you wait? Read this article for up-to-date information about the housing market and smart tips to improve your chances of buying a house.
Crazy days on the Dutch housing market
The property market in the Netherlands has been tight for years. House prices have never been so high and overbidding on a house is the rule rather than the exception. The expectation is that the house price boom continues in 2020 and prices will go up more than in 2019. We’ll explain this with Dutch housing market data of Hypotheken Data Netwerk, NVM, Kadaster and ABN Amro.
Housing shortage in the Netherlands still on the rise
On the Dutch housing market in 2020 there’s a growing need of available houses to buy. There are several reasons for this housing shortage in the Netherlands:
- Since the last crisis not enough homes have been built and the number of houses built each year is dropping. Due to the nitrogen crisis building is now slow to a standstill.
- More people want to buy a house, so new buyers are entering the market. The number of households is growing, the mortgage interest rates continue to drop, the economy is booming and rental prices are high. This makes buying a house in the Netherlands very attractive.
- Investors drive up house prices by investing in buy-to-let-properties, because they can afford to buy houses for a higher purchase price.
The Dutch housing crisis
The housing shortage in the Netherlands will continue well into 2020. Less houses are being built and the number of houses for sale on the market is dropping. The expectation is that about 5% less houses will be sold compared to 2019.
The housing shortage has been growing for several years now. In 2019 the number of houses sold was 4,5% less than in 2018. By the end of 2019, there were 18% less houses for sale than a year before. Due to this shortage, potential buyers can now only choose between three houses, the lowest number so far.
House prices in the Netherlands expected to keep rising
House prices in the Netherlands have been increasing for almost six years in a row. For a short while in 2019, the overheated Dutch housing market seemed to cool off, house prices flattened and even dropped in some places.
Unfortunately the Dutch house prices started to go up again in the last quarter of 2019. House prices in 2020 are expected to rise 4 to 4,5%. Although this is lower than the years before, it’s still a considerable price increase.
The average purchase price of a house in the Netherlands is now € 326.000, 8% more than a year before. The square meter has risen with 6,5%. This makes the current house price in the Netherlands highest it has ever been.
Overbidding on a house
Not only are house prices high on the Dutch housing market, overbidding on a house has become the norm. In 2019, 40% to the houses was sold above the asking price. This is the first time ever that overbidding happened so often in the Netherlands.
Because overbidding seems to be the new standard on the housing market , it leaves you with almost no room for negotiating. Especially not if you want to buy a house in a popular city like Amsterdam, Amstelveen, Haarlem or Utrecht. In these places the asking price can be often considered to be the opening bid and you are expected to overbid.
Overbidding and your mortgage in the Netherlands
Partly due to overbidding, savings are becoming more and more important on the Dutch housing market of 2020. If you want to buy a house in the Netherlands you need to bring savings to the table. You can get a Dutch mortgage up to 100% of the market value of your house. All the extra costs purchase cost to buy a house and the amount that you overbid on the value of the house to win the offer, you’ll have to pay out of your own pocket.
Calculation example overbidding on a house
- Asking price: € 310.000
- Purchase price: € 340.000
- Appraisal value: € 325.000
- Maximum mortgage: € 325.000
- Savings needed: € 15.000 > the difference between the purchase price and the appraisal value
Beware that the amount of savings in this example doesn’t include the purchasing costs and financing costs you’ll have to pay when buying a house in the Netherlands (about 5 to 6% of the purchase price). This calculation example only covers the amount of savings needed for overbidding.
To buy or not to buy a house in the Netherlands?
In summary, the expectation is that the Dutch housing market stays tight and house prices keep rising. However, nobody knows for sure what's going to happen on the real estate market. It's a scientific fact that economic trends and house prices developments can't be foreseen.
So to buy or not to buy a house in the Netherlands? If you want purchase a property and you can afford it, you should. We don't advise you to wait for a drop in house prices.
House prices move up and down, and the value of your house will probably increase in the near future. In the long term the value of your property will rise for sure. Besides the developments in house prices, buying a house will increase your living comfort and it's cheaper than renting.
How to improve your chances on the Dutch housing market?
Because of the tight housing market of 2020, buying a house in the Netherlands might seem nearly impossible. But don’t despair! Although it’s difficult to buy a house, it is possible. After all, every day houses are being sold and bought by happy new homeowners.
A good preparation strongly increases your chances of buying a house on the housing market in the Netherlands. Follow these three tips to help you purchase your dream house:
- Hire a real estate agent: if your house hunting in a popular area, a realtor will give you a much better shot at actually buying a house. He has knowledge of the local housing market and gives you a stronger negotiating position. With an estate agent you’ll be one up on your competition.
- Put in a good opening bid: take your opening bid into careful consideration (an estate agent can also advise you on this!). If your offer on a house is too low, you’re out. However, if you overbid too much, you're wasting your money.
- Book a free appointment with a mortgage advisor: it’s important to explore your Dutch mortgage options in advance. This way you’re sure about your budget and you might be able make your offer more attractive by leaving out the financing clause. Want to know what’s possible for you? Book a free consultation with our experienced mortgage advisors.
Do you want to know more about buying a house in the Netherlands? Please read our article or sign up for our free housing workshop 'how to buy a house in the Netherlands'. We're happy to help you purchase your own property.