Dutch housing market affordable when looking at rest of European Union: ABN Amro

The Dutch housing market is relatively affordable compared to other European countries, ABN Amro reported in the Housing Market Monitor. Home prices in the Netherlands have risen sharply over the past 20 years, and their affordability has deteriorated, but not as exceptionally sharply as in other EU countries. According to housing market economist Mike Langen, the Netherlands is one of the more affordable purchase markets in the EU despite its problems.

Housing is not just a Dutch problem. The European Commission speaks of a housing crisis in Europe. Purchase prices and rents are rising throughout the EU, reducing affordability and particularly affecting young Europeans. The EU countries with the largest house price increases over the past ten years are Portugal (up 85 percent), Hungary (up 80 percent), and Lithuania (up 56 percent). The Netherlands is in seventh place with a price increase of 48 percent. The average price increase in the EU is 32 percent.

Buying a home is difficult in most EU countries, and single people, in particular, spend an alarming share of their income on housing. Mortgage costs as a percentage of net income amount to around 29 percent for Dutch couples and 40 percent for single people, making the Netherlands one of the lowest in the EU. In many EU countries, the share of net income is considerably higher, with an EU average of 48 percent for couples and 54 percent for single people.

When looking at the entire housing market, including tenants and homeowners, Dutch couples pay an average of over 15 percent of their income on housing. The EU average is 16.6 percent. However, Dutch single people have the second highest housing costs in the EU, paying an average of almost 42 percent of their income on housing, compared to an EU average of almost 30 percent.