The housing market in the Netherlands has started to cool, after a long period of growth. In 2022, sales activity declined for the second consecutive year, reaching about 193,000 home transactions. That suggests a contraction of
five years earlier. Homeownership is important in the Netherlands: Since 2005,
. One of the drivers of this increase is a tax relief called hypotheekrenteaftrek. Homebuyers can deduct the mortgage interest from the income on their annual tax return for up to 30 years.
Why has the Dutch housing market slowed?
One of the many reasons for the suppressed activity is affordability: House prices had been on an uninterrupted upward trend for nearly a decade, before they started to decline in 2023. In January 2022,
prices soared by over 21 percent from the same month the previous year – a figure even higher than during the housing boom of the late 90s.
Depending on the province, homebuyers spent between 319,000 euros and 546,000 euros to buy a property in the second quarter of 2023. Though it is possible to purchase a property all cash, most sales are financed through a mortgage. Fluctuations in the interest rate of mortgage loans therefore additionally impact the affordability of homes. The
correction in property prices is forecast to continue until 2024.
Renting an apartment in Amsterdam
Amsterdam is by far the most expensive city for renters in the Netherlands. With its presence of many international companies, the city offers vast employment opportunities. Picturesque canal systems, rich cultural life, and good urban transport are some of the other factors making Amsterdam a popular place to move to. In 2023,
the population of the city exceeded 918,000. Naturally, demand for housing has led to the rents of residential properties growing. In 2023,
the monthly rent per square meter hit 26 euros, higher than in the other major cities in the country: The Hague, Rotterdam, and Utrecht. Concerns over the affordability of rental housing have led to the Dutch government planning reforms in the sector, including capping rent increases for social and private rentals. Despite the increase in regulation causing concerns among industry experts, Amsterdam r
anks among the top five European cities for overall real estate prospects.
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