Things to consider before buying a house in the Netherlands

Change in the Dutch housing market

For the first time in two years, mortgage advisers at Expat Mortgages are seeing more realistic prices and properties selling for the asking price - sometimes even 10 percent lower. There is more choice on the market; buyers can take more time and dissolving clauses have returned, protecting buyers in case they cannot raise the required funds or encounter big surprises in a valuation or survey.

“Three things have happened,” says Henk Jansen, founder of Expat Mortgages. “When you buy a house in the Netherlands, your buying contract has two clauses that mean even after you have come to an agreement, you can back out. The first is the legally required three-day cooling off period: you can’t take it out, so even in the hot market of the past year and a half, you could still get out of an agreement in three working days.”

“The second is what we call the “conditions subsequent” or dissolving clause. For example, four weeks to raise your mortgage. In the hot market, you weren’t able to get this clause in a contract. That was awful - because if the valuation came back lower than the agreed price, you were in trouble. The clause is back, and that’s really good.”

Figures from estate agent organisation the NVM on October 6 showed its largest ever quarterly drop in house prices, with a 5.8 percent fall nationally. In areas such as IJmond, Amsterdam, as well as around Haarlem, The Hague and Utrecht, the price fall was even bigger. Although prices were still fractionally higher year-on-year (2 percent), the NVM said the "madness" in the housing market is over.

Supply is up

The second development is around supply. The Netherlands does have a housing shortage of an estimated 350.000 homes. Earlier this year, a historic low of around 13.000 properties were for sale with registered estate agents on Funda. However, this bounced back to almost 34.000 by September, according to Het Financieele Dagblad.

Meanwhile, there was good news in the budget for 2023; during his speech, the King announced plans to build 900.000 homes between now and the end of 2030.

“In general, there are more houses for sale now than there were in the past,” says Henk. “They stay for sale a bit longer than before, which gives us room to negotiate. In the past, you could negotiate, but only up.”

“Our 26 advisors say that, in general, houses are sold for the asking price now, whereas a year ago, it was the asking price plus 10 percent. There are still houses with so much interest that they sell for above the asking price in a few days. But, also, I see people buying a house for 10 percent under.”

Return to reality

A sense of reality has returned. After years of tiny interest rates - and negative interest at the European Central Bank - the cost of borrowing has risen to normal levels. Mortgage rates have more than trebled this year, to around 4.5 percent. A slight recession is expected in the Netherlands and the economic situation of neighbouring countries like the United Kingdom is ringing alarm bells. Rabobank, the Netherlands’ largest mortgage lender, expects house prices to fall “modestly” in 2023. Meanwhile, Statistics Netherlands (CBS) recorded the first slight drop in house prices from July to August (with a year-on-year rise of 11,9 percent).

“Asking prices are getting more realistic,” says Henk. “People are a bit more careful. Our potential clients, internationals, are in general more aware that they are taking a risk than the Dutch. They compare things with the situation in their home country instead of the situation in the Netherlands in the past two years.”

Although this might sound like a thunderstorm of problems, it could be an opportunity for expats - who are used to saving for a house and faced with the alternative of high rents. “In general, for internationals, it is getting more attractive: more for sale, room for negotiation, and a better position than the Dutch.”

Budget: 2023

The budget measures aim to take more heat out of the housing market, strengthening the position of home buyers. Stamp duty on investment properties will rise from 8 percent to 10,4 percent, while people buying a home for themselves pay 2 percent. First-time buyers under 35 pay no stamp duty, but their parents will no longer be able to give them 106.671 euros towards a house, tax-free. Property investment funds with foreign investors (FBIs) will lose their effectively tax-free status. The NHS mortgage guarantee, offering security to lenders for average-priced homes, is expected to rise. More municipalities have rules meaning you have to occupy lower-priced homes yourself in the first four years.

According to Henk, it is an opportunity for international house buyers - especially those who employ experts to boost their local knowledge and help them avoid costly mistakes.

“It’s not just about houses for internationals in Amsterdam but also people who left everything behind in Ukraine, students, all kinds of people,” he adds. “There are good signs for people buying a house - and the best is a promise of 900,000 new places to live.”