The newly formed ‘het kabinet’(Dutch cabinet) has taken the state of the 2022 housing market into account. To this effect, Hugo de Jonge has been appointed as the Minister of Housing. One of the main goals of this cabinet is to bring back a balanced housing market - providing Dutch residents a reasonable chance to rent or buy a house at an affordable price.
Here are some of the strategies which have been proposed to be used to achieve this goal:
Developers are going to facilitate the construction of more properties. As more new builds are constructed, there will be more opportunities for people to enter the market.
Housing corporations will have access tax benefits when they build new and affordable housing, with the goal to introduce 100.000 new builds per year.
Explore policy and taxation options that make purchasing a home more expensive (i.e. taxing the amounts that people overbid, cancelling the interest rebate, etc.), though this is not supported by the governing parties.
Cancellation of the ‘Jubelton’, the tax free gift of €100.000 from parents to their children
Explore measures that curb some of the powers of investors in the housing market
What is the status of housing prices after Q4/2021
In the Netherlands, the average housing price in Q4/2021 was equal to €438.000 for existing properties and €466.000 for new builds. We also saw that offers in the market were 33% lower than the last quarter of 2021 for existing houses; as they say in Dutch, “The market is drying up”.
One of the main drivers of these housing prices is investor activity. Investors are willing to buy properties at a high cost because their financial returns (rental income and appreciation) make the purchase an attractive deal.
In the last 10 years, 15% of houses have been sold to investors. This amounts to 25% in de Randstad. At the start of 2021, 700.000 of the 8 million houses in the Netherlands were owned by private investors.
How to stop investors buying the affordable houses
In 2021, the government decided to raise transfer taxes for investors from 6% to 8%. It is very likely that by 2023, the transfer tax for investors will be raised to 9%.
Along with this adaptation of transfer taxes, the government also made it possible for cities to take local action against the purchasing of affordable housing by investors. It is expected that 130 of the 352 municipalities will introduce a self-occupancy obligation for existing houses based on the national law of ‘purchase protection’ . For new build properties, this rule already applies in most of those cities.
The following table gives a provisional overview of the rules that were communicated in the press until now and will be applied after approval of the council of the municipalities:
There is a bit of skepticism about whether banning investors in this way will have a big impact on the market.There is also a lingering question if these measures will solve the total problem of affordable housing both for the rental and the buyers market.
However it is already a first step towards slowing the increase of selling prices. If the projections of housing experts come true, then the expected rise in prices in 2022 only by +/- 10% can be the ideal moment for you to find an ‘affordable’ place to call home.