February 22, 2023

Recap of the 2021 housing market in the Netherlands

As we near the end of the year, it is time to reflect back and look forward to 2022.

How it started

This year we witnessed a rise in housing prices all across the Netherlands. The year started out with the introduction of new fiscal rules to help support starters entering the market, and to curb investor activity - one of the driving factors of rising purchase prices. The first rule introduced was that transfer tax (2% of the purchase price) would be exempt for homebuyers under the age of 35 years, for houses up to €400.000. Secondly, investors on the contrary would have to pay an increased transfer tax of 8% starting as of 2021.

What happened in 2021?

The rental market experienced two different market trends. Travel restrictions before summer forced a lot of expats to postpone their relocation plans to the Netherlands, reducing demand, and thus rental prices in cities that depend on expat tenants (such as Amsterdam). On the other hand, once border restrictions loosened up throughout the summer, demand for housing bounced back and we witnessed an accelerated rush to listed properties, and ‘overbidding’ even became a common practice for rental properties.

For the buying market, housing prices rose by 19.2% within one year1 - making the average purchase price €419.000 for existing properties and €455.000 for new build homes. Additionally, there was a decrease of 43.9% in the number of houses for sale  in Q3 as compared to the previous year.

What are the drivers for rising housing prices?

In any economic system, the relationship between supply and demand is of utmost importance. In this respect, it is clear that the demand for homes is much higher than the existing number of available properties - with a shortage of approximately 300.000 properties today.

Further, 1 million additional homes will need to be built by 2030 to fulfill the expected demand. Additionally, fiscal benefits make ‘money cheap’. Tax exemptions, interest rebates, no capital gains and tax free parent donations push prices up, as they free up capital that homebuyers will add to their bids in an attempt to make their offers more competitive. The same applies for the low interest rates we’ve experienced this year.

An alternative for buying a house could be to rent a nice place, save some money, and buy at a later stage. However, it’s important to consider the rent prices which can be high and may come close to monthly installments of buying the same property.

Upcoming changes for 2022

In Q4 of 2021, a new amendment was introduced to help reduce the competition from real estate investors2. Cities are now able to make a purchase conditional to self-occupancy by the homebuyers. Amsterdam, Rotterdam and Eindhoven have already decided to enforce these measures starting 20223. In the meantime, other cities are focusing on providing cheaper loans to starters in an attempt to make it easier for them to enter the housing market.

However, we believe that only a complete, comprehensive, and multi-faceted plan from the government would effectively address the current imbalance in the overall housing market.

In Q4 2020, the new Dutch government introduced their new housing plans:

  • Appoint a new minister for housing who will take the lead in developing a balanced and sustainable housing market.
  • Cancel taxation of housing corporations so they are able to reinvest their profits in building new houses.
  • Build 100.000 houses per year, with ⅔ of the properties being “affordable housing” (€355.000 in 2022).
  • Build 30.000 units (and/or convert office spaces) for temporary housing.This would be to support students, labor migrants, people who are losing their home, and homeless people.
  • Only count the real value of a study loan when applying for a mortgage.
  • Cancel the tax free gift from parents to children (a.k.a. the ‘jubelton’).
  • Adjust and recalculate social rent depending on (lower and higher) income. The goal is to introduce a rent price protection for the mid-priced rental segment.
  • Increase transfer tax for investors to 9% in 2023.

What’s clear from these measures is that the most important factor is the relation between demand and supply. As demand for houses becomes balanced with the supply, prices will begin to stabilise. To do this, it is not only important to provide enough homes for homebuyers, but also to offer a good number of homes to tenants in order to bring rental prices to an affordable level.

Given that the implementation and timeline for these measures are still undecided, the housing market will not see the results immediately, but rather in the several years to come.

Key Takeaways

In the end, there are a lot of upcoming measures that are yet to be implemented with the goal to support tenants and home buyers in the Dutch market. On the contrary, investors will be limited in their purchasing power due to the introduction of owner-occupancy conditions, extra taxation, and maximum rent prices. What won’t change in the near term will be the interest rebate incentives for a homeowners, the currently low mortgage interest rates4, and the shortage of houses available to Dutch residents.

However, one key challenge in achieving a balance in supply and demand, is the price of raw materials and the shortage of builders.

Nic Vrieselaar (Housing Economist at Rabobank), believes the actual measures will not result in a decrease of the prices in the next coming years. Further, a research report from the bank shows that prices are expected to go up in 2022 by 12.4% along with a 3.4% rise by 20235.

That said, based on the above measures and analysis, buying a house in 2022 can still be considered a good investment. But of course, that all depends on your personal situation, your finances, and other individual factors.

Interested in exploring whether renting or buying is best for you? Schedule a free call with our Expat Housing Specialists and we'll customise our guidance based on your specific needs.

1between Q3/2021 and Q3/2022

215% of houses are sold to investors the last 10 years, this number even amounts to 25% in the Randstad,, and