The Market Shift: A 10% Drop in House Prices Signals Opportunity
If you’ve been contemplating entering the Dutch real estate market, now may be the perfect moment. According to ABN Amro, house prices have experienced a significant 10% decline in real terms over the past year across the country. However, there’s a silver lining as estate agents and official figures from the land registry indicate signs of market stabilization.
Seasonal Boost: Post-Summer Opportunities
Diversified Choices for Buyers
Traditionally, post-summer witnesses a surge in Dutch homeowners enhancing their properties for sale, coupled with private investors opting to sell their buy-to-let homes. This trend creates an environment where buyers hold more sway, thanks to an increase in available properties. Henk Jansen, founder of Expat Mortgages, notes, “Dutch people typically refrain from selling during their summer holidays, leading to a decrease in supply in July. However, as the school season resumes, homeowners gear up to list their properties again, presenting an opportune time for buyers.”
Supply and Demand Dynamics: A Growing Shortfall
The housing shortage in the Netherlands persists due to a decade-long shortfall in construction, a growing population, and a preference for smaller households. Despite the government’s ambitious plan to build 900,000 houses by 2030, challenges such as slow planning approvals, a decrease in newbuild purchases, and rising borrowing costs for developers pose obstacles. With an expected 3.5% decrease in house building this year, the current shortfall stands at 390,000 homes, a significant increase from 300,000 just a year ago.
Unveiling Investment Opportunities
While the housing shortfall intensifies, intriguing properties may come to market. Reports suggest that large Canadian and Swedish investors are contemplating selling their housing stock, and estate agents observe small investors initiating sales. New regulations aimed at incorporating more rental homes into the rent-controlled sector, along with less favorable tax conditions, are prompting professionals to sell. Henk Jansen comments, “The changing landscape, with increased transfer taxes and higher wealth tax on properties, is redirecting investor interest from real estate. This shift might lead to more properties hitting the market, benefitting potential homebuyers.”
Rental Market Dynamics: A Catalyst for Homeownership
A Shift in Rental Dynamics
The evolving landscape of former rentals hitting the market creates an additional incentive to buy. As investors divest their properties, the supply of rental homes decreases, potentially driving up rental prices. Despite an overall drop in free market rents this year, demand remains high in city locations, making it challenging for renters to secure suitable properties.
Strategic Approach for Renters
As landlords can still use short-term contracts, coupled with the ability to evict tenants after two years with a no-fault eviction and raise prices, the rental market faces uncertainty. Jansen advises potential buyers, “With investors selling properties, renters might find an opportunity to buy from their landlords. It’s a prudent time for renters to explore the possibility of purchasing, securing stability amid changing rental dynamics.”
In conclusion, the current Dutch real estate landscape presents a unique convergence of factors, making it an opportune time for aspiring homeowners to take the plunge into a market where potential gains and diversified choices await.