Dynamic on Dutch Housing Market Definitively Vanished
THE HAGUE, 11/07/13 - The market for housing sales in the Netherlands will not be as dynamic as it was for years in the longer term either. Much more movement could however arise on the rental market, estate agents and Rabobank believe.
A return to the transaction levels of before 2008 is no longer to be expected, said Netherlands Association of Estate Agents (NVM) chairman Ger Hukker on Wednesday. “We will no longer achieve the level of 215,000 housing sales per year in the coming 10 to 15 years. Count on 125,000 to 150,000 transactions per year.”
Around 25,000 of the vanished buyers are first-time buyers, who had access to financing earlier despite temporary employment contracts, according to Hukker. Another 20,000 vanished buyers are those who in the past were allowed sharp financing, because the banks assumed that the value of the home would rise. And then there are another 37,000 households that cannot move house due to their remaining debt.
The NVM is not alone in its view of the future. Rabobank recently published a report (‘Living differently’) in which it envisages for the coming decades, under the influence of all kinds of trends and government policy, a transition to a different type of sales market. The Netherlands will move “from a relatively dynamic to a more static sales market, like in Belgium and Germany, and from a very static to a more dynamic rental market.”
Up to now, the owner-occupier’s home in the Netherlands has been a ‘selling-on home’. First-time buyers were lured at an ever younger age into lavish mortgage conditions, and then started to make housing careers. This will change, says the bank.
At the same time, in the rental market, largely controlled by the government, rents will go up in the coming years and it will be easier for private persons to rent their homes. The non-regulated rental sector (above 681 euros per month) will grow, Rabobank believes.
But whether such a transition from a dynamic buying and selling to a dynamic rental market will really emerge is the question. Johan Conijn, extraordinary housing market professor at the University of Amsterdam, has doubts.
Conijn: "Investors are extremely selective and only invest in attractive areas. Large parts of teh Netherlands will have no dynamic rental market. The danger is however that we lose a dynamic buying market and get no dynamic rental market in return. Then a large number of households will be in trouble. There is no alternative for them.”