Dutch housing and property market news archive
Dutch House Prices 7 Percent down in March
THE HAGUE, Tuesday - House prices were on average 7.0 percent lower in March 2013 than in March 2012. The price drop is less substantial than in the previous month, when house prices dropped by 8.3 percent, the Central Bureau for Statistics (CBS) reported on Monday.
Prices of existing owner-occupied dwellings were at the same level in March 2013 as in August 2003. They were more than 18 percent down from August 2008, when house prices reached a record high.
In the first quarter of this year, a total of 23,090 house sales were registered. House sales dropped 3.6 percent below the level of the first three months of 2012. The CBS figures are based on Land Registry (Kadaster) registration data.
Amsterdam Stalls up to 90 Pct of Building Projects
AMSTERDAM, Tuesday - Amsterdam municipality is only going to develop building projects when it is sure they will be sold. This means that 60 to 90 percent will be postponed, Land Affairs Alderman Maarten van Poelgeest said Monday.
The so-called equalisation fund means that the municipality earns money with the sale of ground and invests again in new building projects, is running according to the most pessimistic estimate at a loss of over 200 million euros in 10 years. To reduce this loss, the city executive only wants to go ahead with projects that will yield money for Amsterdam in the next four years.
The alderman believes around 10 percent of the planned building projects can be developed with a profit. For about 30 percent, this is doubtful and 60 percent will definitely be put on ice “because there is little chance that a buyer will come forward in the short term.” In this last case, this concerns some 24,000 houses. One of the plans affected is the prestigious IJburg 2 project.
Dutch Housing Sales down in March from a Year Earlier
HE HAGUE, Friday - The number of homes sold in March totalled 8,993, down 1.4 percent from a year earlier, but up 13.1 percent from February, the Land Register reported Thursday.
The figures relate in effect to transactions in December, as it takes about three months before preliminary sales deals are enshrined in contracts and registered. This also explains the month-on-month increase of 13.1 percent.
In December and also November, there were relatively more housing sales because it was still possible to benefit from the fiscal regime then still in force. But from January, first-time buyers have had to redeem their mortgages via an annuity if they want to be eligible for mortgage interest tax deductibility. In February - read November - sales also rose strongly from the previous month, by 26.2 percent.
The number of registered mortgages developed in the same way. There was a decline of 7.3 percent in March from a year earlier, and an increase of 16.4 percent from February.
All types of homes were more in demand than in February. The sales increase for detached homes was strongest at 33.8 percent. Compared with the figures of 12 months earlier, the March figures were only better for detached houses and corner houses, by 4.3 and 6.1 percent respectively. Sales of terrace homes were down by 4.7 percent.
Compared with the February figures of the Land Register, those in March were better in all provinces except Flevoland, where 11.4 percent fewer homes were sold. Zeeland saw the biggest increase of 37.7 percent.
Compared with a year earlier, the March figures from the Land Register were worse in half the provinces, led by Drenthe with an 11.5 percent sales drop. In Limburg, however, sales were up 8.6 percent year-on-year.
'Land Position of Municipalities a New Bubble’
THE HAGUE, Wednesday - Municipalities are expected to continue to develop shopping areas in order to absorb their land positions, increasing empty space in town centres, says Cor Molenaar, associate professor at Erasmus University.
The Netherlands already has the world’s highest shop density. Nonetheless, a new 30,000 square metre mega-mall is to open at Ressen junction near Elst. In nearby Zevenaar, a 15,000 square metre shopping area will be added and in Duiven, 20,000 square metres.
There are enough examples in the US and the UK that show that these types of projects are always at the expense of other retailers, who are already having difficulty keeping their head above water, said Molenaar in Tuesday’s Het Financieele Dagblad. "This means this is putting a bomb under the retail trade,” Molenaar warns. "It will lead to more vacancy and degeneration in the town centres.”
At the top of the market, in the years between 2000 and 2009, municipalities bought land for future housing construction and shops. Now that the housing and office markets have collapsed, land prices have fallen and municipalities in fact have to write off their land positions. But there is little or no sign of them doing so.
The land positions of municipalities form a new bubble that can burst, Molenaar believes. “Nijmegen, for example, has land positions on its balance sheet for more than 200 million euros, on which it is paying 12 million euros in interest every year. For Apeldoorn, the figure is more than 300 million euros.”
Consultants at Deloitte calculated that municipalities are heading for a total loss of 4.4 billion euros on their land positions. This explains why so many shopping centres are still being built. Municipalities are not going to give the land back to the market at dumping prices, so they are opting for going ahead with planned shop projects and outlet centres on the city borders for which there is now no longer any need.
Fewer Houses Sold, Price Decline Slows
AMSTERDAM, Friday - In the first quarter, 23,750 homes were sold, over 30 percent fewer than in the last three months of 2012. Prices also still declined, but no longer as rapidly as in 2012, the Netherlands Association of Estate Agents (NVM) reported Thursday.
The poor first quarter corrects the peak in the last quarter of 2012, when a buying wave was prompted by the introduction of tighter mortgage rules from 1 January. “As a result, many buyers quickly made their move before the year-end,” said NVM chairman Ger Hukker.
Nonetheless, the NVM director has received some cautious signals that the bottom of the market is in sight. “The affordability of purchased homes compared with rented homes is increasing. And the supply and selling periods for homes for sale are stabilising.”
Hukker also says that the tempo of price declines for sales of homes is slowing. The average selling price in the first quarter was 206,000 euros, 5.5 percent lower than a year earlier. The deepest plunge was in the third quarter of 2012 when prices dropped by 7.3 percent from a year earlier.
In the first quarter, 227,000 homes were up for sale on average, 4 percent fewer than in the previous quarter. This is mainly because many people who did not sell their home eventually took the for sale sign in from the garden.
Since the deepest point of the crisis in September 2008, prices for which homes are sold has already dropped by around 18 percent on average, the NVM figures show. The fall was sharpest for detached houses, at 20-25 percent. Terrace houses lost value the least, by 14 percent.
Hukker reckons that house prices will remain under pressure this year, with an expected decline of 5 to 7 percent. Only in the second half of 2014 does he see stabilisation. After that, housing prices will then at most go up with inflation, the NVM predicts.
The average time taken to sell a home was 170 days, 2.1 percent longer than in the fourth quarter of 2012. Terrace houses went fastest, with their selling time going down by 4.8 percent to 131 days. Other housing types took longer to sell, at 155 days on average for apartments and 258 days for detached houses.
Property Tax Rises Faster than Permitted
GRONINGEN, Wednesday - The size of the OZB property tax is rising faster than permitted this year. The municipalities are exceeding the stipulated ceiling of 2.7 percent, research institute COELO reports.
The OZB tax rate is a percentage of the value that is awarded to a property (WOZ value). The municipalities set both the WOZ and the OZB rates.
The national proceeds from the OZB will rise this year by 3.86 percent, according to calculations by COELO, part of Groningen university. This is more than the 2.76 percent agreed as the ceiling (the macro-norm).
Home Affairs Minister Ronald Plasterk finds the increase too high. He will bring this up with the Association of Netherlands Municipalities (VNG), a spokesman said Tuesday.
On average, the household of an owner-occupied hope pays 251 euros annually in OZB. Residents of Texel are best of with an average of 116 euros, while the OZB is highest in Blaricum at an average of 667 euros.
The macro-norm is agreed by the VNG and central government. Because municipalities are not sticking to this, however, they will jointly raise 38 million euros more than was the intention.
The total housing costs will go up by 1.9 percent this year, according to COELO. This is because the waste collection tax has come down and sewage tax has gone up by less than previously, but this is partly offset by the big OZB hike.
Postponement of 6.5 Percent Rent Hike Threatened
THE HAGUE, Saturday - The rental hike of 6.5 percent for tenants with an income of over 43,000 euros will not come into effect this year for many, says the umbrella organisation for public housing corporations Aedes. There are too many implementation problems.
Corporations and private landlords are allowed to raise rents for people with an income of up to 33,614 by 4 percent from 1 July. Between 33,614 and 43,000 euros a hike of 4.5 percent applies while those earning more than 43,000 euros can expect a hike of up to 6.5 percent.
Corporations need data from the tax service in order to carry out the income-linked rental increases. But the owner of the home, the tenant or the income is often not known by the tax service, or the house number is wrong.
For most corporations, data is missing for 10 to 30 percent of the homes. The data has to be in by next week at the latest in order to be able to carry out the rent increases. Several corporations have no faith in this and have therefore decided to raise the rents of all tenants by 4 percent.
Last year, the income-linked rental increase also failed to go through due a court ruling that the tax service must stop providing income data because the act that makes the hike possible had not yet been adopted. The act has since been adopted.
At the tax service, “the problems are known,’ a spokesman said. According to the taxman, the cause of the delay lies with the administration of municipalities.
Housing Minister Blok wants to lure middle incomes to buy a home via the sharp rental hike. The rent increase will be creamed off by imposing a new tax on the housing corporations, which is to run up to 1.7 billion euros annually in the coming years.
House Wants Variants
Temporary Rental of Empty Buildings and Homes Made Easier
THE HAGUE, Thursday - The temporary rental of homes up for sale is to be made easier. The Lower House has backed the proposal of Housing Minister Stef Blok van Wonen to extend the Vacancy Act (Leegstandswet).
Homes for sale may under certain conditions be rented temporarily more than once. The rent charged is also freed up. This will in future be determined by the owner-landlord and temporary tenant.
A permit from the municipality will still be required for temporary rental. But municipalities are not allowed to pose any supplementary permit conditions. A permit will in future be issued for five years in one go, and an owner can rent out a maximum of two private homes at the same time.
Longer temporary rental of empty offices and of homes for demolition or renovation will also be possible. The maximum permit duration for temporary rental of living space in empty offices, hospitals, nursing homes, hotels and schools will go up from five to 10 years.
The maximum duration for temporary rental of properties for demolition and renovation will also go up from five to seven years. In today’s market, demolition and renovation plans for rented houses often takes more time than initially planned.
The proposed bill will now go to the Upper House for debate. Blok has asked for it to be considered before the summer. The changes would then be expected to come into effect from 1 July this year.
Rotterdam Works off One Quarter of Empty Office Space
ROTTERDAM, Saturday - Rotterdam has worked off one-quarter of its surplus office space in a year and a half’s time by giving it a different zoning, Alderman Hamit Karakus reports.
Some 100,000 square metres were given permanent new zoning as hotel, health practice, housing, schools and crèche. Another 50,000 square meters were temporarily zoned as ‘creative collection places.’
Before the project began, the city had 600,000 square metres of empty and often outdated office space. Rotterdam is also tackling office vacancy by only allowing newbuilding of offices at a few places in the city: The area around Rotterdam Central station, the inner city and the Kop van Zuid.
Dutch House Prices 8.3 Percent down in February
THE HAGUE, Friday - Prices of existing owner-occupied dwellings were on average 8.3 percent lower in February 2013 than in February 2012. The price drop is less substantial than in the previous month when the house prices were 9.6 percent lower, the Central Bureau for Statistics (CBS) reported yesterday.
Prices of existing owner-occupied dwellings in February 2013 were at the same level as mid-2003. They were more than 18 percent down from August 2008, when house prices reached a record high.
In the first two months of this year, a total of 14,157 house sales were registered. House sales dropped nearly 5 percent below the level of the first two months of 2012.
Sales of Homes Pick up Slightly
THE HAGUE, Tuesday - Sales of homes have picked up slightly following the sharp drop in January. In February, the Land Register registered 7,897 sales, 1.2 percent more than in the same month last year.
Compared with January, sales rose by 26.2 percent. But in the first month of the year, sales of homes plunged by no less than 53.9 percent. This was because many home-buyers had already completed their purchase by the end of last year, so that they could still benefit from more favourable mortgage rules.
Nearly all housing types saw an increase in the number of registered sales in February. Terrace houses gained the most, by 4.1 percent. The biggest decline was for detached houses, at 15.9 percent. February trends for selling prices will be reported later this week.
Crisis Forces Amsterdam to Reduce Ground Prices
AMSTERDAM, Saturday - Amsterdam has become one of the first municipalities to lower the asking price for land substantially. The city council hopes the move will get the virtually moribund market for new housing going again.
The council is cutting the average asking price by 10-15 percent. This will bring the price of one square metre of ground for an apartment complex down to about 700 euros from 800 euros last year.
The council is leaving the price of office sites unchanged. This is remarkable, as vacancy is about 16 percent, but it says the prices are not being reduced because rents were unchanged last year. New office buildings are still in reasonable demand.
Ground sales were one of the most important sources of income for the city for years. House prices have come down by around 17 percent since they peaked in 2008, in line with the rest of the country.
Home-buyers and tenants will not really notice the price cut. On average, the ground price only contributes 10 percent of the total costs of new housing. Based on this, the total housing price can only go down by around 1 percent.
According to Edwin Buitelaar of the Amsterdam School of Real Estate (Asre), the price reduction is relatively late. “It is a correction from last year, when house prices were already under pressure.”
Amsterdam is unable to say what the expected cosequences will be for the city’s revenues. This is largely dependent on demand. Last year, the council issued 273,000 square metres of ground.
'Upper House Will Not Vote for Housing Corporation Tax’
THE HAGUE, Tuesday - Labour (PvdA) is threatening to torpedo the so-called landlords’ levy. The party in the Upper House will never vote for the plans as they now look, said Senator Adri Duivesteijn on radio programme TROS Kamerbreed.
The cabinet of conservatives (VVD) and Labour (PvdA) wants to raise rents for middle income tenants substantially. It wants to cream off the proceeds for the public housing corporations by imposing a tax on them that will run up to 1.75 billion euros by 2017.
On behalf of the PvdA, Duivesteijn voted for a rental increase in the Upper House yesterday, but expressed criticism of the levy for housing corporations which is linked to this. The vote has not yet been held on this levy.
Duivesteijn considers that the levy for the public housing corporations should be transformed into an investment measure to get the building industry out of the pits. The government would also eventually gain income from this via VAT. A levy purely to get the budget deficit in order lacks vision, according to Duivesteijn.
VVD MP Mark Verheijen reacted critically. He referred to the unrest on the housing market. “If the PvdA allows unclearness to continue where it is every week and every month, this does not help. I assume that the PvdA is good for the signature that was affixed in the Lower House and will enter into talks with the Upper House to convince them.”
It does not appear that Duivesteijn feels bound by this signature. “I would take it well if my substantive criticism were taken seriously. If in the Upper House it is only a matter of the ritual: ‘Thou shalt vote in favour because everything has been thought out for you elsewhere’, then there is no big job for me.”
In the search for a majority in the Upper House, agreements have already been made by VVD and PvdA in the Lower House with the opposition centre-left D66 and small Christian parties ChristenUnie and SGP. But if the PvdA withdraws, the plan will be torpedoed.
VVD: Less Rules for Renting out Own Home
THE HAGUE, Friday - The conservatives (VVD) want to improve the opportunities for home-owners to temporarily rent out their homes.
This is one possible way to get the flow-through on the housing market going abain, said VVD MP Barbara Visser yesterday in a Lower House debate.
In the Netherlands, owners cannot put someone else in their homes just like that. Their municipality must issue a licence. Visser does not want the municipality to decide on temporary rental of owner-occupied homes, but rather that the owner and the mortgage provider make agreements on this.
People who have bought a new home but have not yet sold the old one will be the main beneficiaries of easier conditions. “Now it costs time and money and involves a lot of bureaucratic red tape,” said Visser.
In fact, some municipalities are using temporary rental of homes as a new cash cow, says the Netherlands Association of Estate Agents (NVM). Almere takes the crown here, raising its rate for the licence necessary for this by no less than 400 percent to 375 euros.
In the major cities, Amsterdam charges 154.50 euros for the application and the same amount for an extension licence after a year. In Utrecht, the costs of the first application are 87.70 euros, with 110.35 euros for an extension. In The Hague, the figures are 143.70 and 71.78 eruos resepctively. Rotterdam is the positive exception, charging no fee.
The NVM has called on The Hague to call a halt to “excessive fee increases.” “The double home-owners are often already facing financial problems, and high fees militate against socio-political wishes to make temporary renting easier,” says NVM chief Ger Hukker.
Housing Corporations Threaten to Take Govt to Court on Levy
THE HAGUE, Wednesday - The public housing corporations say they will go to court if the cabinet sticks to the levies that it plans to impose on the corporations. Their umbrella organisation Aedes is already making preparations for this.
Housing minister Stef Blok wants to impose a new tax on the subsidised rental sector, revenues from which will run up to 1.7 billion euros a year. The money should come from increases in rent for middle incomes. The corporations however say the rent increases will amount to at most half of what they have to pay to the government.
Hans van Harten, director of the Amsterdam Federation of Housing Corporations (AFWC), says a court case is a last resort against the plan. First, all its energy is aimed at softening the measures. “The lobby circuit is now in full swing. The bill still has to go to the Lower House.”
Gerard Anderiesen, executive of Amsterdam corporation Stadgenoot, considers it unacceptable that tenants should, via the housing corporations, shoulder more of the burden of bolstering government finances than other groups of citizens. “This should not be allowed. In our articles of association, it state that we must invest our money in public housing, not in the national Treasury.”
Anderiesen also refers to the European Treaty for Human Rights. This states that the government can only intervene in ownership law if there are urgent reasons for this.
Breakthrough on Pension Funds in Mortgages
THE HAGUE, Wednesday - Pension funds are prepared to use a portion of their enormous mountain of capital to finance banks’ mortgages, says Kees van Dijkhuizen, who was commissioned by Housing Minister Stef Blok to bring the players together on this plan.
After nearly three years of difficult talks between government, banks and pension funds, a breakthrough appears to have been reached for the first time. Van Dijkhuizen expects that the pension funds will take over mortgages worth some tens of billions of euros from the banks. This will give the banks more scope to undertake new lending to home-buyers. It is also expected that the mortgage interest rate that home-owners pay will be able to come down.
"Pension funds receive a higher yield, the state takes no new risk whatever and banks see their financing costs come down,” Van Dijkhuizen, a former top civil servant at the finance ministry, said yesterday in Het Financieele Dagblad newspaper. "The details still have to be worked out. But the basic attitude is now positive.”
Under the plan, there will be a new body that finances lending with National Mortgage Guarantees (NHG) for banks. This body will in turn raise money by issuing bonds carrying a state guarantee. The State can give this guarantee because the banks have to take on the risk of non-payment, insofar as it is not covered by the NHG.
For pension funds, it appears a very attractive proposal because its effect looks very much like the plan that the funds themselves brought out earlier. This included a sort of national mortgage bank. Rabobank in particular was against it because it threatened to produce a competitor with state guarantee. The body now proposed under the new plan cannot however sell any mortgages itself.
The advantage for the banks is that they can refinance part of their mortgages, giving them more scope for other loans. Thanks to the state guarantee, interest costs will be lower than on the mortgage portfolios that they now sell directly to investors.
Blok Wants to Tackle Landlord Exploitation
THE HAGUE, Thursday - Housing Minister Stef Blok wants to amend the Housing Act to combat the renting of overly small and bad space at exorbitant rentals.
Following the amendment, municipalities should be able to impose a rental ban or otherwise take over the management of the property of a home owner in cases of persistently bad maintenance, Blok announced yesterday. He also wants to arrange matters such that municipalities can impose a fine in case of overcrowding.
The minister has presented his plans to the Association of Netherlands Municipalities among others. Rotterdam and other major cities had asked the cabinet for more powers against slum landlords.
Number of Building Permits