More Amsterdammers move to Rotterdam, The Hague as housing prices soar

An increasing number of Amsterdam residents are looking for a home in The Hague or Rotterdam as housing prices in the Dutch capital are increasingly unaffordable, Dutch realtors association NVM said with the release of its quarterly figures on Thursday. These two cities are now also seeing housing price increases far above national average, NU.nl reports.

In the first quarter of this year, the national average transaction price involved in a home sale was 273 thousand euros, 9.7 percent higher than in the first quarter of last year. In The Hague and Rotterdam, sale prices increased by 24 percent and 15 percent respectively.

"Although there are regions where the housing market is flourishing, it is not going great in more and more parts of the country", the NVM said. Homebuyers are faced with rising prices, less choice, and have to "scrape the bottom of the barrel" to find a home. "If this continues, things will soon stall", NVM chairman Ger Jaarsma warned, according to the newspaper.

Over the past year, the supply of houses for sale shrunk by more than a third to 73 thousand in the first quarter. On average a Dutch homebuyer had a choice of 4.5 suitable homes, compared to 6.1 in the first quarter of last year.

In the first quarter NVM brokers sold a total of 33,800 homes, 13 percent less than in the same period in 2017. The largest decrease, -19 percent, was seen in the sale of apartments. The number of cheaper homes, up to the price of 150 thousand euros, sold in the first quarter dropped by nearly 40 percent. In the categories up to 200 thousand euros and up to 250 euros, the declines were 19 and 16 percent respectively. "That part of the market is rapidly drying up", Jaarsma said.

According to NVM, this problem has a number of causes. "Too few new homes are put up for sale to meet the demand. Consumers wait to sell their own homes until they found a new one", Jaarsma said. Housing corporations are also putting too few houses up for sale to reduce the shortage on the housing market.

The NVM also notes that private investors are playing a bigger role. Last year one in ten homes were bought by a private investor to rent out, making them unreachable for first time buyers and buyers with a limited budget. In municipalities like Rotterdam, The Hague and Amsterdam, a fifth of homes sold are bought by private investors. In student cities like Groningen and Maastricht it is around a quarter and almost a third respectively.

"Private investors mainly buy small and cheap housing and thus increasingly push out the starters on the owner-occupied housing market", Jaarsma said.

The NVM expects that the number of home sales and the supply will decline further in the coming period, resulting in even higher prices. "Something really has to be done now. Destination procedures in both the inner cities and in the outlying area must be drastically shortened, otherwise the housing market will stall completely", the NVM chairman said. He suggests converting more commercial and agricultural real estate into housing. And more homes need to be built for all target groups.

"We now often see that small apartments are being built, but that is a temporary solution." he said. Currently more homebuyers are dependent on smaller homes due to the increased house prices. "In the near future that may be different and people will want more space and facilities. Then those small apartments will have become worthless."