Dutch housing market trends: A guide for expats

The grey skies are giving way to sunshine, tulips and crocuses are starting to peep through and the signs are good for house selling. Henk Jansen from Expat Mortgages brings you this guide about the Dutch housing market trends in 2024.

In the last two months, figures from Statistics Netherlands (CBS) have shown that Dutch house prices are creeping up year after year, while the mortgage interest is still relatively high at around 4%. After the slump in 2023, this trend means that we can expect more houses to become available on the market this spring, thus there will be more choices for buyers.

But the main issue in the housing market at the moment is the shortfall: there are almost 400.000 more homeseekers than there are properties available in the Netherlands. In the upcoming two years, this gap will probably go up even more. According to the latest government estimate, the Netherlands really needs to build 981.000 homes before 2030.

New developments

Although new developments aren't the whole solution, there are some interesting things going on in the market, like tiny houses or very small-scale homes. Another part of the answer is transforming former office buildings into living units.

At the end of the day, we need to build more houses both within the city area and outside of it. In the past, you saw cities expanding outwards but now you see the suburbs growing towards the city. For example, the municipality of Diemen is growing towards Amsterdam, and empty spaces will be filled with houses in the near future.

Housing investments

Another trend for the Dutch government is to discourage people from treating properties as investments. This goes not only for formal investors but also for normal people. Dutch tax and financial incentives are thought to be one of the things driving up our housing prices to some of the highest in Europe when compared with our salaries. Having a second house is taxed far more now than it was in the past, for instance. Furthermore, transfer tax has increased for investors, while it is zero for young, first-time buyers getting their first, modest home.

Slowly but steadily, you see some investors selling their portfolios, and this is a small part of the solution. For instance, the Swedish investor Heimstaden is selling 12.000 houses of the houses they have in the Netherlands. All of these are all small solutions to the current housing crisis.

Scheefwonen (Crooked living)

Another thing that could be investigated is the system to check whether people who are in social housing still need to be in social housing - something that is called scheefwonen (or crooked living) in Dutch. The Netherlands used to have "premie A" housing, which was a subsidised way for people on lower incomes to buy a new house. But after five years, you had to prove that you were still eligible.

It should ideally be the same for social housing: if you start earning more, you should pay more. Some people in the Netherlands live in prime properties, earning a lot but paying just 700 euros per month on rent - and that's unfair.

Climate labels

"Climate label" is another buzzword within the Dutch housing market right now. The Dutch Authority for the Financial Markets (AFM) came up with the idea last year because a lot of Dutch houses are at risk of flooding or sinking and this is something that the homeowners will need to pay for because it's not covered by insurance. Repairs can also cost tens to hundreds of thousands of euros.

At the moment, this risk isn't priced into the cost of housing. A number of big Dutch banks think it should be so buyers are clear about how much they need to borrow and save for repairs.

Sustainability

Sustainability is another big theme. With the Dutch aiming to leave gas power behind by 2050, homebuyers are encouraged to make their houses future-proof. There is extra loan capacity available to help insulate your new home, and you can also borrow a little more for super energy-efficient properties that cost more. The great advantage is that a cosier home will reduce your ongoing energy costs.

Many people are now considering buying one of these types of new homes the government is building across the Netherlands. More and more internationals are exploring the possibility of a newly-built property, with no maintenance worries and energy-efficiency built in. The financing for these types of homes can be slightly more complex, so check your options.

Three tips for homebuyers

Prepare, prepare, prepare. First, make an appointment with a financial advisor so you know what you can borrow. List the factors that are essential for you, as well as the ones that are negotiable.

The second tip, based on helping thousands of expats find financing over the years, is to take your time. Buying a house is not like buying a loaf of bread. Ask yourself questions about how the property will feel year-round. If you're going to go to the gym and come home at 11pm, is this an area where you feel comfortable? What is it like on a Saturday morning when you are doing your groceries?

It is wise to check the home's address on the internet. You may not want to live in a house where the last tenants were involved in criminal activities or where the local people call it a "ghost house" with bad karma. Thus, it is never a bad idea to talk to the neighbours before you put in an offer!

Finally, hire a professional, somebody who understands what you are looking for and your personal situation to help you get a house. You are going to pay an immense amount for a property, if you think about it, and it's important to get the winning lottery ticket when there is a lot of competition. You don't need a qualification to be a makelaar (realtor), so ask your colleagues and friends as well as professionals for a reliable, honest estate agent.

Be prepared

On a large scale, the Netherlands needs an integrated solution to its housing challenge: a dedicated housing minister, an independent institute making sure that there is enough housing and less of a focus on immigration. But by being well-prepared and aware as a homebuyer or seller, you are laying the best foundation for your happy housing future.

Expat Mortgages specialises in helping expats obtain a mortgage and buy a house in the Netherlands. Contact their team for a free initial meeting or to join a housing webinar.