Amsterdam has entered the UBS list of potential real estate bubbles for the first time, joining eight other cities listed as places where the fear of missing out is driving people to pay too much for a home.
‘The bubble risk seems greatest in Toronto, where it has increased significantly in the last year. Stockholm, Munich, Vancouver, Sydney, London and Hong Kong all remain in risk territory, with Amsterdam joining this group after falling into ‘overvalued’ territory last year,’ the Swiss bank said.
UBS says that since 2015 real prices in the Dutch capital have increased by 30% and the cit ’s housing market is ‘sharply decoupled from the weak countrywide housing market’.
Nevertheless, income and rental growth have kept pace with price growth since 2008, limiting the downside risk, UBS says.
Research last year showed that some 80% of new owner-occupier properties within the A10 ring road cost more than €400,000, while rents of €1,500 for a one-bedroom flat have become the norm.
The city council has decided that 40% of new homes built within the city’s boundaries must fall under social housing rules, meaning the rent can be no more than €710 a month.
A further 40% must target middle income households with rents of around €850 per month or be affordable to middle income home buyers. The remaining properties will target high earners.