House prices in Amsterdam and the Netherlands are increasing at a very fast pace. According to Rabobank, house prices grew extremely fast in the past year. By April 2021 they were 11.5 percent higher than April 2020. Looking back 2 years, and forward 2 years, we have:
- 2019 = +6.9%
- 2020 = 7.8%
- 2021 = +10.9% (forecast by Rabobank)
- 2022 = +4.6% (forecast by Rabobank)
234,000 home sales in the Netherlands in 2021
In terms of number of transactions however, there is no increase, quite the opposite. Indeed, Rabobank analyses that “For full-year 2021, we expect to see around 234,000 transactions, only slightly down on last year’s total. For 2022, we anticipate that sales will fall to 218,000“.
Property prices in the Netherlands: analysis
Average selling price at €410,000
According to the Dutch association of realtors (NVM), the average selling price for a house in the Netherlands surged to €410,000, passing the €400,000 mark for the first time. The main reason for that? Shortage of supply: “Supply is drying up, and buyers will do just about anything to get the property they want” says NVM director Onno Hoes.
Property prices decreased from 2008 to 2014, increased from 2015 to 2021
Dutch house prices have decreased from 2008 to 2014, and increased since 2015. On that front, the Netherlands is not different from most European countries. However, Amsterdam and the Netherlands have known much stronger house price increases than most European countries. Indeed since 2017, the price increases observed in the Netherlands (in blue below) have been significantly higher.
Amsterdam house prices: +84% from 2014 to 2020
Amsterdam’s average annual price growth since 1995 is 3.30% (housepricestrend). Yet clearly, since 2016, property prices in Amsterdam have accelerated way faster than this 25 years average. As GlobalPropertyGuide puts it, “From Q1 2014 to Q4 2020, house prices rose by 52% nationwide, with Amsterdam registering spectacular price growth of almost 84%.”
Average house price transactions in Amsterdam: from €250,000 to €400,000 in just 7 years
While +84% might not ring any bells, check this out: while average house price transactions in Amsterdam were at €250,000 in 2014, they are now above €400,000 (housepricestrend). That’s a very impressive property price boom.
Can property prices in Amsterdam keep increasing? +4.6% in 2022
Shortage of properties for sale & bidding system: the magical formula for price increases
Rabobank anticipates “an average further rise of 4.6 percent in 2022”. One important factor is the important shortage of properties for sale, that is prompting buyers to bid aggressively, hence pushing the prices upwards. Bidding? Yes, because in Amsterdam and in the Netherlands, bidding is a standard. According to iamexpat, “The latest figures from the NVM show that 60 percent of homes are sold above the asking price, and in some cities, like Utrecht, this figure can rise to as much as 75 percent.”
And the shortage of homes for sales seems to continue: “the NVM (Dutch Association of Real Estate Brokers) recorded just 24,500 properties for sale midway through the first quarter of 2021, which is 42 percent fewer than in the same period in 2020.”
Housing affordability in Amsterdam: how much higher can prices go?
House prices are therefore pushed upwards because of a housing shortage, and a bidding system. But how much higher can it go? To answer this question, we must look at other European cities, and realize that housing affordability is still 2 times better in Amsterdam than it is in Paris, or London. Therefore, let’s look at the analysis by housepricestrend below: we can see that it takes 8 years of income to buy a 60m2 flat in Amsterdam, which is much less than the 14 years observed in Paris, or the 16 years in London.
What does that tell us? It tells us that theoretically, if there is no modification in regards to interest rates, loan-to-value, and other major factors, property prices in Amsterdam have room to grow x2. Will they do so? Nobody knows, but on paper it’s a possibility.
Investing in Amsterdam: how to make a rental investment?
The Amsterdam region is home to an estimated 100,000 expats, out of 850,000 inhabitants in Amsterdam. Obviously a lot of the Dutch people, and of the expatriates, wish to buy in Amsterdam, and often to also make a rental investment. To do so, some cities come to mind:
- Amsterdam
Or other popular residential areas such as:
- Haarlem (near Amsterdam)
- Hoofddorp (near Amsterdam)
- Almere (near Amsterdam)
- Amstelveen (near Amsterdam)
- The Hague (near Rotterdam)
- Leiden
- Utrecht
If you’re looking to buy in one of these areas, please get in touch using the button below, describing what you are looking for as precisely as possible.
Bonus articles:
1. buy-to-let mortgage in the Netherlands
2. Blackstone is buying up Dutch residential property from private owners