How to Buy an Apartment or House in Groningen

Surrounded by lush countryside, and packed full of interesting things to see and do, Groningen is a popular place for people to live and work. The province is the most north-easterly in the Netherlands, and it attracts many talented people with interesting jobs and a great quality of life.

Costs in Groningen are relatively low, and this makes it possible to enjoy a good quality of life, especially if you are working in a reasonably well-paid job. The city of Groningen has a relatively young demographic, including numerous students as well as young professionals. This brings a sense of life and joie de vivre, and it enriches the local economy too.

The demand on housing in Groningen is not evenly balanced. Haren and Groningen Centrum have the highest number of people moving into those areas, and this elevates demand. In Groningen Centrum the demand is made up primarily of students, whereas in Haren it is primarily people above the age of 45 who are moving out of the city and up the property ladder.

In addition to this imbalance, the population growth has fluctuated widely over the past few decades due to changes in student numbers; however, it averages out at a long-term trend of 0.7% growth per year. Most of this sustained growth comes from people moving into the area from outside the Netherlands — in other words, expats like us.

Finding Housing in Groningen as an Expat

There's a healthy mix of housing in Groningen, including smaller apartments and large country houses outside the city centre. Groningen is not a large city, and the open countryside is never far away. For this reason, it is easy for people to live outside the city and commute if they need to. As a result, there is less pressure on the housing in Groningen city for larger apartments, which are not in demand by students.

Buying a house in Groningen is therefore a good option; it offers great value for money, and comfortable living. Wages in the city are lower than most other major cities, on average. Part of this comes from the fact that the economy is well-balanced, and includes more people (including students) working "regular" jobs, compared to cities like Amsterdam that have more highly paid positions that skew the average.

The average wage in Groningen is 32% lower than in Amsterdam, while prices are 21% lower overall. If you're earning a good wage in a well-paid job, then your buying power in Groningen is much higher than in almost any other major city in the Netherlands. This is particularly true if you're planning to buy a house in Groningen, because property prices are an impressive 50–62% cheaper than in the capital.

Are You Considering Buying a House in Groningen?

Buying a house or apartment in Groningen is a good idea if you're in a position to buy. Over a long-term perspective it not only saves money on rent payments, but you're also investing in a relatively low-risk asset that has enduring value.

All investments come with risk, of course. While you can't control the state of the property market from one year to another, the longer-term trend for property prices is favourable for owners. You can also mitigate some of the risks by being a wary purchaser, and by being proactive with maintenance needs on your house or apartment. It's always better to maintain a building instead of needing to fix a problem that occurs from neglect, like a new roof or foundations.

A Note on Earthquake Risk

One special thing to be aware of is that Groningen has suffered earthquakes caused by fracking and other gas extraction in the area. These small earthquakes — tremors, really — have caused serious damage to many properties in the area, due to shallow movements in the ground (about 3km deep) caused by the removal of natural gas by fracking.

Most of the thousands of earthquakes that have occurred have been less than 1.5 on the Richter scale, but hundreds have been above this, and some have been above 3. In 2017, this damage cost nearly €1.2 billion in repairs, in addition to another €900 million in prevention and safety measures. Given the imbalance of cost and benefit, gas extraction in the area has been stopped entirely from 2022 onwards.

What this means if you're considering buying a house in Groningen is that some properties have been affected by damage, but the chances of more damage in the future are quite small. Property prices have been affected by this too — they're lower as a result. Keeping in mind that the chances of more earthquake-related damage will continue to decline in the future, right now is probably the optimal time to buy a house in Groningen.

The Benefits of Buying an Apartment (or House) in Groningen

Home ownership is definitely an investment, and that means it comes with potential risks and benefits. These need to be considered carefully if you're thinking about buying an apartment or house. The risks are universal — repair and maintenance costs, price fluctuations, variable interest rates, tax burden — no matter where you are in the world, these are always a factor.

However, the benefits (and some risks) are always particular to each place and the local economy.

• Greater control. With your own home you're free to make more changes, renovations and add value to the property. You also know that you're unlikely to get evicted, because you're your own landlord.
• Building equity. As you make mortgage payments, you build an increasing share of the equity (your share of the value) of your home. As your house or apartment increases in value, this is magnified over time, so long as your interest rate is below the rate of value increase. Right now, mortgage rates are very favourable and the demand for property is strong. As apartments in other cities become increasingly unaffordable, cities like Groningen become more attractive as places to live. Remote working is becoming more normalised, and this means that high earners in Amsterdam will start to set their sights on a "nice house in the provinces" — places like Groningen.
• The option to let it out. You could also rent out your own house if you find work elsewhere, and this will pay your mortgage for you and make some extra cash on the side too. Be aware, if you rent out your house you'll need to inform your mortgage provider and get their approval, and you will be liable for an additional tax burden. A house that you own but do not live in is treated as any other asset in your Dutch tax return.
• Great value for money. The value for money in and around Groningen is very good indeed. You can buy a house in Groningen with a large garden and plenty of bedrooms for the same price as a small apartment in Amsterdam.
• No capital gains tax. There is no capital gains tax in the Netherlands, so any profit you make when you sell is not taxed.

How to Buy a House or Apartment in Groningen

The process for buying an apartment in Groningen is broadly the same as anywhere else in the Netherlands. It has several stages, and there are different costs that must be met. However, the notary and the real estate agents will help you find your way. We cover the house-buying process in the Netherlands in more depth in another article, but roughly speaking it goes like this:

1. Hire a buyer's agent, if you want to. If you're unfamiliar with the market, they'll help keep you on track and avoid unnecessary costs.
2. Search online for houses and apartments yourself. Check the Funda website every day. If you see something suitable, call the agent and arrange a viewing.
3. Calculate your maximum budget, minus the costs, and make a bid. You should know how much you can borrow, or include a "financial clause" in your offer. You can also add other clauses to your offer, like obtaining a healthy building inspection.
4. Secure a mortgage, and have the inspection and valuation conducted.
5. Sign a purchase agreement and pay the deposit (10% of the offer).
6. Sign a transfer deed and pay the remaining balance.
7. Book a moving truck, and move into your new home!

As the purchaser you will need to pay the purchase costs and other fees. Most of these are not deductible. You can expect to pay 4% of the purchase price, plus an additional €4,000 in one-off costs.

Special Things to Look for When Buying Property in Groningen

It's always good to just "get out there" and start viewing properties. This way you'll build a solid understanding of the different kinds of properties and layouts. You'll also get a feel for which agents are expat-friendly, and which ones are most informative or helpful.

After viewing a property, the agents will usually send you a packet of documents that inform you about the essential information. This will include information about the VvE (if there is one), and any ongoing costs, rights or encumbrances that apply.

The more houses you look at, the better you will understand your own wants and needs.

Enjoying Your Own House or Apartment in Groningen

If you plan on working and living in Groningen for a number of years, you should consider buying your own apartment or house. It could be a solid investment opportunity, and it offers you greater control over your own living situation. You should, of course, be aware of the potential risk, but the chances are that it will be financially advantageous in the long term.

While there is some initial cost and hassle that comes with buying a house, you'll find that it will also help you build a sense of stability and make you feel more "at home." There's also a wider choice of properties, including smaller apartments which have a greater potential for renting out later on (if you decide to move), or larger houses in the countryside. This makes it easier to find the perfect place for you.

Your dream home in Groningen is waiting! Are you ready to find it?