There are some signs that interest rates are going down, and this year buyers can borrow a little more, particularly if they are going green. On the downside, the shortage of affordable housing to buy is continuing. Here’s a round-up of the latest housing news.
What is happening to interest rates?
Interest rates stabilised in the last few months of 2023 and experts predict this will continue into 2024. “We will see some ups and downs in the coming period, but in the end, we will see a slight decrease with the 10-year fixed rates,” says Kenneth Leenders, chief executive of Expat Mortgages. “So we will be looking towards 3.5% rather than a rise to 5%. If the European Central Bank decides to lower rates it will have an additional effect, although it will take some time to filter through into mortgage rates.”
Although the Dutch monitor mortgage interest rates closely, Expat Mortgage’s clients are less focused on the issue, says Kenneth. “Mortgage interest rates in their home countries are usually a lot higher. The 4% and 4.5% rate is not a deterrent to international workers. They have a different baseline.”
How much can you borrow?
Borrowing capacity is going down slightly overall in 2024 but some changes will benefit buyers, particularly if they buy a home with a high-energy label or if they pledge to take measures to boost energy efficiency. The extra loan will begin at €5,000 for energy labels D and C
“An increasing number of mortgage lenders are rewarding people who opt for an energy-efficient home,” says Kenneth. “Energy labels are having more influence on the housing market.”
In addition, the under-35s who buy a property for the first time will not have to pay transfer tax if their new home costs up to €510,000, up €60,000 on the 2023 limit. Single people will also have more borrowing power. Singles earning at least €28,000 a year will be able to borrow an additional €16,000 to help them get a foot on the property ladder.
Are house prices still going up?
There was a slight increase in the number of homes sold in the third quarter of the year but house prices have also been rising slowly for several months now. And the supply side has also gone down significantly.
“Buyers are very aware of this,” says Kenneth. “Overbidding is very much back with us and it is becoming a seller’s market again. There is not enough supply and people realise that. The shortage is about 400,000 properties at the moment. And renting, as we know, is becoming even more difficult.”
Government measures to expand rent controls are encouraging smaller buy to let owners to sell their properties. “Of course, that helps the buying market but it is very negative for the rental market,” says Kenneth. “Nevertheless, I think we are still going to see an increase in house prices in the coming year.”
What about the market for a newly built property?
International workers have been more reluctant in the past to buy a new property. After all, you have to wait for your home to be completed, which can take a year or more, and you will have to pay a slightly higher price.
However, says Kenneth, this is now changing. “There are a lot of upsides to a newly built property. You don’t have to pay for the transfer costs or a valuation, and you don’t need a real estate agent either.
“And of course, new properties are also more sustainable, which is good for your energy bill, and your borrowing capacity. Nor will you have any maintenance costs or unpleasant surprises. And as the first owner, you also have more of a say in the finishing, so it is easier to make your home really feel like yours.”
Find out more about buying a new home
Expat Mortgages also hosts regular webinars on the process of buying a home in the Netherlands if you are thinking about taking the plunge. The next one which focuses on buying a newly-built property, takes place on January 24, at 7 pm. Sign up here.
If you’ve got any questions about the process of buying a home in the Netherlands, you can always check out the FAQs on the Expat Mortgages website to see if they have the answers. Feel free to get in touch – they have an open chat line – if your question is not covered.