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House prices fell by 4% in 2011

Thursday 12 January 2012

House prices fell by an average of 4% last year, the Dutch estate agents organisation NVM said on Thursday.

In total, 118,000 properties changed hands, a drop of 7% on 2010. The drop in sales in the fourth quarter was 13%, compared with the same period in 2010, the NVM said.

The organization expects prices to drop by a further 5% this year.

Tax cut

The government's decision to cut the tax paid on property transactions from 6% to 2% of the value has not boosted the housing market as hoped, property experts told the Telegraaf.

Estate agents had hoped the tax cut would boost the number of properties changing hands by 10% but that is far from being reached, the paper says.

The cut has shaved thousands of euros off the cost of buying a house but has failed to convince people to take the plunge.

Banks have also brought in tougher rules on mortgages, reducing the amount of money people can borrow. In addition, only half the loan home owners borrow may be in the form of an interest-only repayment mortgage.

Estate agents

Meanwhile, the NVM says in the Financieele Dagblad that the housing market crisis has not led to fewer people taking up the profession.

On Monday, 14 new estate agents were sworn in, in line with developments in recent months, chairman Ger Hukker told the paper.

Nevertheless, many established companies are on the verge of bankruptcy, the paper says. Many carry out 20 or fewer transactions a year which generates an income of between €1,500 and €2,000 a month, Hukker told the paper.

In 2006, estate agents sold some 210,000 homes but last year the total almost halved to 121,000. The NVM has some 3,500 members, rival organisation VBO 1,011 and the smaller VastgoedPRO 797, the FD said.

© DutchNews.nl


Readers' Comments

I guess now that we are not so easily exploited in purchasing a home this nice cabinet will be sure our rents become more expensive - of course!
sheeeesh, let's force our young people to buy homes and then mis-manage the situation so bad that all lose money, a lot of money - yeah well done. very well thought through

By Bill | 12 January 2012 2:53 PM

I personally believe that the price of most of the properties is very much inflated... I'm not in a hurry to buy and will wait for further reductions.

By relax | 12 January 2012 3:16 PM

I wonder what the vaunted vinexwijken will look like in another 10 years after structurally high unemployment, credit contraction, the bursting of the Dutch housing bubble, and the subsequent emptied streets do their work? One should probably look to the exurban developments near the expressway-exit hinterlands of Spain and the USA for their answer to this very interesting situation.

By Kevin | 12 January 2012 3:54 PM

People are scared to buy as they do not know what will happen with the current favourable mortgage policy (Hypotekaftrek). even if the government has committed to leave it unchanged, pressure from the dutch central bank and the Eu to change this generous approach will previal at the end .... and you don't want to be there when it happens! It would be much better if the government says, ok we start cutting the benefit 1% per year until it dies out. People would get some certainty and would be able to take a decision whether to buy or not...speaking for myself as well!!

By ciccio | 12 January 2012 3:57 PM

@relax: of course the price of a house is quite inflated. When it costs substantially more to buy an existing house than it costs to build one (at the peak the difference was up to 2x), then you can consider the prices grossly inflated.

Sadly, there are many many people out there that will suffer negative equity. The trick is to slowly let the air out of this price bubble, rather than let it pop.

I find the approach contradictory: govt. tries to encourage sales by cutting tax, and banks discourage by making borrowing more difficult. Sigh..joined up thinking at some point would be appreciated.

By H. | 12 January 2012 4:18 PM

The price of property is still inflated despite the drop of the property transfer tax. Why not just get rid of it entirely and see if that does anything?

By Michael | 12 January 2012 4:24 PM

an article in yesterday's Parool is saying that the housing prices in Amsterdam have also sunk by 5%. I have no doubt that a much more liberal socialistic cabinet will replace this Republican-like bunch of fools that are in there now, and soon. When people start losing lots of money - and jobs, it generally shakes them out of their short-term thinking state of mind and makes them realize the importance of these social controls and safety nets.

By Bill | 13 January 2012 7:21 AM

I was not expecting anything different. How can you expect a 4% decrease to incourage people to buy when most properties are much more over-evaluated?
This combination of prices dropping and more difficult mortgage will just mean the quality of housing will drop. If as owner I know I am not going to get what I have paid the house (including renovations) back, I will simply not renovate. so buyers will find crappy houses on the market which they acnnot renovate because they will not get enough money from banks.
At the end things will be even worse than today.

By joanna | 13 January 2012 8:05 AM

Hypothetical question. Given that a number of expats own homes in the Netherlands, if all these changes come (no more interest deduction, falling prices), what is to stop them from just walking away from their home, leaving the country and letting the Dutch banks sort it out? Is there really a penalty if they decided they never wanted to come back to live here?

By Rick Kane | 13 January 2012 3:01 PM

Rick Kane: Sounds like the NL will have a major housing crisis like the US is having now. Foreclosures are an easy way out but renting is beginning to skyrocket by 40% in some areas. People will be living in cars and tents soon. The lucky ones will find an empty cave if they could move out the residing bear. Either way living conditions are facing a slippery slope.

By Marie | 13 January 2012 5:44 PM

House prices are going to rocket again. Maybe not for a few years but they will. If you look at house prices since the 60s the data shows constant big rises and then small falls but overall house prices never drop (although they may be temporarily in negative equity if your unlucky)

Where have all the first time buyers gone? What are the all families doing that are having kids? They are all still living in the same tiny houses they had before kids? With the interest rate reduced people (who have not lost their jobs in the downturn) are better off now than when things were going well. I know I am one!

By R Van de Vaart | 13 January 2012 7:00 PM

@Rick Kane. Unlike the US, if you walk away from a house in Europe (or much of Europe) then the bank will sell the house and pursue you (internationally if needed) for the balance/shortfall. You'd also be making it just that little bit harder for every 'honest' expat who moves here to obtain a mortgage from that bank in future.

By osita | 13 January 2012 7:11 PM

Will be interesting to see how home price continue to fall if they value the home to ones that were sold in the area. Prices will really fall if they follow US trends and with bankruptcies on the rise.

By marion | 13 January 2012 11:18 PM

@Van de Vaart: First time buyers are locked out of the market because their wages haven't kept up with the price of homes. The solution over the last 30 years here was to extend more credit, and to give generous tax incentives in order to keep everything "going". This, and low rates generated a massive bubble here in Holland. The latest scheme over the last 10 years was to subsidize the building of new homes near the expressway exits and sell them cheaper than older homes. -This perverse policy will leave the Gemeenten, construction companies, and the homeowners of both new and old homes wiped out.

By Kevin | 14 January 2012 8:30 AM

one more thing... Prices never rise forever. -There are lots of reasons why prices could have rose from the 60's onward. Increased birth rate creating a scarcity of homes, plus rising wages are all good reasons. Those are macro trends which have ended here in Holland. We now have a low birth rate with declining or stagnating wages, with a high number of people retiring. On top of that we have years and years of austerity and debt-deflation to look forward to in The NL and in the EU periphery. Add in further deindustrialization and the whole picture does not bode well for housing in the medium term. Don't believe the hype of the real estate sharks.

By Kevin | 14 January 2012 8:34 AM

Of course house prices will fall as there is a shortage of credit at the moment. Has soon as confidence comes back to the credit market prices will soon rise again. They always rise quicker and more than the ever fall. The Netherlands never had near the the property bubble that countries such as the US, UK and Spain did.

By John | 14 January 2012 2:24 PM

Mortgages in Netherlands, at least most of them, are personal loans guaranteed by the property, not credit drawn against it.

This mean there is no "walk away from the property" thing here. You are still liable to pay the loans.

The upside of it is that it makes less likely for people to get loans for multiple houses, or "second and third mortgages" against the same home, because banks must make provisions for losses based more on those for whom it lend money, not as much as the properties that secure the loans.

By Andre L. | 15 January 2012 11:42 AM

R van der Vaart: I do not see how you can make any comparisons with the 60's or any past movements in the Dutch housing markets. This was before globalization, and way before NL got itself involved in the 'black hole' of exponentially expanding debt called the 'EU'. Back in the 60's all the way through to about 2000, when the euro was introduced, the Dutch were able to artifically control their housing market by unrealistic loan instruments. This is over now (or will be very soon).
The days of rocketing housing values in the Netherlands are also over, I'm afraid. Just like anywhere else in the world.

By Bill | 15 January 2012 5:09 PM

Our house has been devalued by more than 20,000 EUR. We recently looked in to moving back to the states. We have lived in our house for four years. We didn't "renovate", rather we added an extra room on to the kitchen and replaced the roof on the attached sunroom.

Our thought was to at least break even, but as it stands we will still be 20,000 EUR short if we sell now.

We were hoping to see some equity built up in time, but as the market is going we seem to be heading further and further "under water".

By Pam | 16 January 2012 11:56 AM

Based on http://economist.com/houseprices
1) house prices haven't reached the bottom yet
2) for the last 20 years prices were growing quicker that salaries
3) in the middle of 70s Holland had a property bubble but no lessons were studied, so the bubble appeared again
4) Prices in Japan is falling for the last 20 years, so Please no more stories "we're small country" or "everyone will buy a house"

By Max | 16 January 2012 3:02 PM

@Marie: Or a caravan. That's me right now and it's pretty freakin' cold. Thanks to civil servant budget cuts, my contract expired sooner than I expected and I haven't been able to find a job since because every position I apply for has 60 other applicants. And since I'm a buitenlander, *swoosh*, there goes my CV right out the window.

By Stupid | 16 January 2012 3:53 PM

@ Stupid. I'm also an expat & despite reports of +200,000 unemployed in construction(I'm a carpenter) it hasn't stoped me finding work.

By Donaugh | 16 January 2012 8:05 PM

@Stupid: Why don't you *swoosh* back to where you're from then. Foreigners are sometimes treated as 2nd class citizens by many employers everywhere. They don't even take time to read many foreign CV's anymore which is a shame. Wouldn't it be easier to find a job where you are not considered a foreigner? Doesn't the Dutch govt help unemployed foreigners like everyone else?

By Jan | 16 January 2012 10:58 PM

@Max Don't have to worry about many people wanting to buy a house in Nederlands. Reason: depressing weather, higher taxes, not really a country where people want to live forever except for getting a cheaper university education than places like the UK. Most move back home afterward.

By sophie | 16 January 2012 11:05 PM


I've also "lost" 24,000 EUR in the past 4 years, its called rent.
Funny how people who live in "Social Housing" are looked upon as a bunch of scroungers when we are the ones who actually have to pay our way in life regardless of house price fluctuations.

By WorkAreaBar | 17 January 2012 9:38 AM

When I bought my flat in Amsterdam, the thinking was "there is no more space to build in the city and demand is constantly rising, so risk is minimal". I used to believe that. Now, when I look on Funda, I see so many houses for sale across Amsterdam that it depresses me. On a brighter note, some friends of mine who bought their house a year ago, but now have to move out of the country, were able to sell it and break even. I guess breaking even is about the best we can hope for.
I hope the gemeente reduces my erfpacht value by -4% now!

By Rick Kane | 17 January 2012 9:42 AM

@WorkAreaBar, I agree 100%.
I can only claim tax back against my rent if my wages drop bellow 21.000 pa.

By Donaugh | 17 January 2012 10:12 AM

Why doesn't Stupid move home? Because moving costs money?
If you even have to ask a question like that, you're better off than you think...

By CW | 17 January 2012 10:29 AM

@WorkAreaBar: don't forget to include in the 20k that Pam lost, the cost of interest on the mortgage, which is comparable to your 24k. So, to compare apples with apples, she'd have lost 44k. If you include the cost of your rent, then you have to include the cost of her interest payments as well.

@Rick Kane: yes, the gemeente will reduce the WOZ on the dwelling...and then increase the taxes to ensure they continue to receive the same taxes from you. Of course, when the property prices go back up...

By H. | 17 January 2012 1:20 PM


Indeed, people leaving in "social housing" are looked upon as a bunch of scroungers, because other people have to pay for a similar rented housing 2 - 3 times more.

By Rep | 17 January 2012 6:30 PM


I'll take Pam's word for it that she "lost" 20,000 on the deal including interest payments.

By WorkAreaBar | 18 January 2012 2:38 PM


Where I live private sector rents range from 500 per month to whatever level people think that the market can handle. 1000-15000 monthly usually gets you more house in a more "desirable" location.
Tho' if Rutte gets his way this sort of argument will soon become redundant due to the policy of the selling off of "social housing" stock.

By WorkAreaBar | 18 January 2012 2:59 PM

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