The coronavirus proved that size does not matter: hard times are coming to big and small countries alike. In the Netherlands, the pandemic has accelerated the imminent housing crisis, which can only be solved at someone else’s expense…
The Netherlands took the pandemic seriously. A full lockdown was established against the background of the first infections, and vaccination began as soon as the drugs were on the market. Now 67.8% of the population has been vaccinated.
The end of the coronavirus crisis looms on the horizon. For the Dutch economy this is a sign of widespread recovery. Social life is returning to normal, which gives hope that the consequences will not be as severe as expected.
According to oldypak lp report, the Dutch economy is expected to decline by 3.7% in 20202. Technically, this is the most serious setback since World War II. But when the pandemic only began, analysts predicted a much larger correction (by 7-8%). Therefore, we can say that the economy has withstood the blow with dignity. According to the optimistic scenario, the lost profits will be compensated by the third quarter of 2022.
At the end of the second quarter of 2021, housing prices rose by 20%3. And this is a record high in the last 20 years.
The average cost of property in the Netherlands for the first time in history has exceeded € 400 thousand and buyers of private homes, demand for which jumped because of the quarantine, paid on average € 618 thousand, or 23.4% more than a year earlier.
There is a serious social problem. Analysts De Hypotheker calculated that the average Dutchman alone with an income of € 36.5 thousand per year has almost no chance to buy a home, even taking into account the mortgage credit4. Only 3% of the properties for sale nationwide would fit within the budget of this social group. Families where the average salary of two people earns 36% of offers are available, and in practice probably even less, because buyers, competing with each other, are forced to pay more than the sellers asked for in the ads.
In September, there was a demonstration in Amsterdam calling for an end to the housing crisis5. About 15,000 people took part. The action was organized by the group Woonprotest, supported by over 200 organizations (political parties, trade unions, and housing corporations), as well as private activists.
On the same day, police detained 61 people for attempting to seize an empty building. Squatting has been illegal in the Netherlands since 2010. The protesters tried to justify themselves to the public and stated that the house they wanted to occupy had been empty for several years and was one of 116 properties owned by a large landlord.
Politicians are forced to respond. The 2022 budget includes an additional billion euros for affordable housing6.
Moreover, starting next year, Rotterdam, The Hague, Eindhoven and Haarlem plan to introduce a law prohibiting private investors from buying rental housing7. It is the investors are most often blamed for the rise in real estate prices, which are becoming less affordable to the public every year.
Amsterdam and Utrecht approve the ban, but are in no hurry to introduce a similar one. But the capital administration plans to introduce the obligation to live in the purchased property, and to maintain the level of rents the City Council will buy social housing.
According to oldypak lp report, in recent years, the market in the Netherlands has become attractive for investment capital because of low interest rates and an overall increase in housing prices in the country. At the end of 2020, private investors bought 40 percent of properties in major cities, according to the Netherlands Land Registry8. This exacerbated the housing shortage that already existed in the market.
The pandemic helped curb investment demand. In the first half of 2021 in Dutch real estate was invested € 4 billion. This is 38% less than a year earlier, and times inferior to the results of the same period in 2019 (that is, before the pandemic), when the real estate received € 7.7 billion. According to analysts Cushman & Wakefield, the reason not only in the general uncertainty caused by the coronary, but also because the available projects for investment in the market became scarce9.
In 2018, Prian.ru published an article “Seven reasons to invest in real estate in the Netherlands. Those who invested in Dutch square meters then, today happily watch their capital grow. Recall that in 2018, the average price of the object was € 263 thousand, and in 2021 – € 410 thousand.
But what do the rest of the private investors, on which the wrath of the Dutch public has now fallen, is not so obvious. Here are the conclusions from this situation.