Three-way split in housing market

Amsterdam - Living in the city is becoming unaffordable for buyers without well-stocked savings, and shrinking areas continue to shrink. In between, affordable housing in suburbs is pressing.

De Nederlandsche Bank warns of that three-way split in the housing market in a report released this morning.

The central bank figured out that of all the homes sold in Amsterdam since 2013, more than a quarter were paid for in cash - that is, without a mortgage. Even those buyers who do take out a mortgage take between €50,000 and €70,000 in their own money. Without that contribution, often a "super gift" from the buyer's parents, an Amsterdam home is unobtainable, DNB says.

Worrying

Buyers are being lured into "worrisome" bidding processes, according to DNB. "They bid against each other and sometimes take risks by waiving financial or construction caveats." Nearly half of all Amsterdam homes are now sold without financing caveats, and nearly 60% change hands for more than the asking price.

Renting in the big city has become just as impossible. Families who are in a rental house do not get around to saving for a house because of the high monthly payments.

Too hard

According to DNB, there is no housing bubble, at most an overheating of the market. Bank President Klaas Knot did not dare to make that statement at the end of March. "In the big cities, and certainly in Amsterdam, things are going too fast," he said then in an interview with this newspaper.

"With the result that the housing market is no longer accessible to very large groups. There are high valuations, but then you also have to borrow heavily to pay those high prices. At the current 10-year interest rate, that may look nice, but we will only know if it is really sustainable and whether or not it is a bubble when those interest rates start to rise."

Source: telegraph

Translated with www.DeepL.com/Translator (free version)