Buying homes tougher than ever for first-time homebuyers, study reveals
The chances for first-time buyers to purchase a home are at a historic low, as evident from research by BLG Wonen reported by AD on Thursday. This decade poses unprecedented challenges for first-time homebuyers compared to previous generations.
BLG Wonen's research spans from 1981 to 2021 and investigates the difficulties faced by newcomers in the housing market. The study aimed to address the perception among older generations that buying a home has always been challenging. “That myth has now been busted,” said to AD director Frank Soede. “It's much more difficult than it used to be.”
In 1981, nearly 70 percent of home buyers were first-time buyers, but 40 years later, this has dropped to just under 50 percent. In 1981, only one in ten first-time buyers cited high costs as the reason for unsuccessful home searches, but this has now become the primary obstacle for one in three people.
The research indicates that people moving are willing to pay significantly more for new homes, widening the affordability gap for first-time buyers. In 1981, this gap was 20,000 euros, but it has now increased to 120,000 euros.
The research indicates a rapid decline in the position of first-time homebuyers, particularly over the past twenty years. During the 1980s and 1990s, starters had better opportunities in the housing market, largely due to higher levels of construction production during those decades.
The challenges for first-time homebuyers have increased due to less construction, population growth, and more single-person households. The number of single first-time buyers seeking homes rose by 43 percent from 1995 to 2021, leading to increased competition.
The Dutch realtors’ association NVM recognizes the image of struggling starters. "It has become increasingly difficult for them, with the low point being the years between 2020 and 2022," said NVM Wonen chairman Lana Gerssen. “The tighter the market, the faster prices rise and the faster that starter is pushed out of the market.”
However, the housing market is showing signs of improvement this year according to the association. This change is attributed to government measures such as higher transfer taxes for investors, a rental price cap system, and some cities enforcing self-occupancy rules and purchasing bans.
BLG Wonen director Soede told AD he believes it is premature to celebrate and urges the new Cabinet to focus on increasing housing availability. He notes that current policies create too much competition among groups. "As long as the pie doesn't get bigger, the problem will just keep moving around,” he concluded.
