Is this the right time to buy a house?
The coronavirus outbreak calls this into question. What does it all mean if you’re currently thinking of a home purchase? Is it possible to view and buy a property, and what will the market do?
Not business as usual
It is not business as usual. Open houses are, of course, no longer allowed. It is still possible to physically view houses, though. While keeping social distance, of course. Most estate agents will ask you to not come with more than two people and to wear gloves. At the property, you cannot touch anything. That’s not all. It’s also possible to take advantage of video tours and agents can show you the property via FaceTime.
If you do make an offer and it's accepted, the closing will be different too. Traditionally, a real estate agent attends the transfer at the notary office to assist their clients. This is a typically joyous experience at the end of the process. Of course, at the moment, this is not possible. So, to keep you out of a crowded conference room, a digital option at the notary office is now available and legally accepted.
What will the future hold?
The coronavirus is leading to fewer homebuyers searching for a property, as well as some listings being delayed. Those looking to break into the housing market might have been teased with predictions that property prices will drop in the near future.
Recent property sales data shows that prices are holding steady and declines have been mild. Transaction volumes, listings and consumer sentiment index numbers have all dropped but the "new normal" of low transaction activity is starting to stabilise. Some people expect that property prices will see a decline over the next one to two years. But will that be true?
Demand still high
There was a lot of demand out there before the crisis hit. We know that at the beginning of this year, there was a shortage of 315.000 houses. This is high, considering that the latest prediction is that the Netherlands will have a population of 18 million in 2024. Additionally, there are more households than houses, the housing construction is lagging behind and there is a shortage of building locations and builders. Also this year, there was the CO2 issue.
These indications predict that there are still a lot of people out there who are thinking about buying and probably will all jump in when they feel more comfortable about the future. The temporary softening of the housing market will likely be followed by a rebound.
There might be an opportunity out there for those who are determined to buy a home and see it as more of a long-term investment. They will potentially have less competition from other buyers. I would suggest that if you are in that position, with a stable job and a good income, it's probably not the worst time to go out and look. In fact, this may be THE time for you.
No one-size-fits-all answer
Everyone's circumstances are different, so there's no one-size-fits-all answer on whether it is a good time to buy a home. Recession or not, people are always questioning whether this is the right time to buy. There is always a risk because it’s impossible to time the market. You cannot predict the best time to buy a house on a rational basis.
Buy a house because you want to and can afford it. To live well and enjoy your home, don’t try to speculate when the prices are best. At the end of the day, it will be your home, the place where you should feel happy.