You wouldnโt know it from the weather, but we are heading into the summer. A lot has changed in the housing market. The slight downturn in prices in 2023 has been fully reversed. According to Statistics Netherlands (CBS), the average home cost 7.5% more in April 2024 than a year before and the average property transaction was for a record โฌ435 984.
This means if you are going to be in the Netherlands for at least three years, and itโs in your best interests to buy rather than rent, a good strategy and proper research are crucial. The very top of the market seems to have slumped in price and the most expensive street in the Netherlands is worth less than a year ago, but there is still a shortage of properties compared to buyers. This means a lot of competition for one-bedroom flats and more affordable homes.
The Foundations Factor: home buyers must know about this
The Dutch housing market is facing a major challenge: problems with house foundations. At the moment, 425,000 homes need foundation repairs and this could soon rise to one million homes (one in eight properties).
Banks, regulators, and the government are raising concerns. The next coalition will need to draw up a national plan to support home owners and stop buyers being duped by hidden costs. What does this mean for you if you’re buying a house?
Hereโs what you need to know:
๐ก ๐ฅ๐ฒ๐ฐ๐ผ๐ด๐ป๐ถ๐๐ฒ ๐๐ต๐ฒ ๐๐๐๐๐ฒ: foundation repairs arenโt covered by insurance: they are your cost
๐ก ๐๐ฒ๐ ๐๐ต๐ฒ ๐ฅ๐ถ๐ด๐ต๐ ๐๐ฒ๐น๐ฝ: work with a knowledgeable real estate agent
๐ก ๐๐ป๐๐ฒ๐๐ ๐ถ๐ป ๐๐ป๐๐ฝ๐ฒ๐ฐ๐๐ถ๐ผ๐ป๐: a structural report is crucial so do not buy without one
๐ก Do the Sums: new foundations typically cost โฌ120,000: factor this into the price
๐ก ๐๐ผ๐๐ฒ๐ฟ๐ป๐บ๐ฒ๐ป๐ ๐ฆ๐๐ฝ๐ฝ๐ผ๐ฟ๐: a future fund may help with some investigation and repair costs
๐ก ๐๐ผ๐ผ๐ธ ๐ณ๐ผ๐ฟ ๐ก๐ฒ๐ ๐๐ฎ๐ฏ๐ฒ๐น๐: a proposed “climate label” could help you make informed choices
The foundations factor can make the search for the right home more challenging. But with awareness, careful planning and the right help, you can find the right house at the right price.
How to Bid Securely and Successfully
When you make an offer, you can build in two conditions to avoid paying a 10% penalty. One is that you are able to raise the money you need to buy the property. The other is that you will do a structural survey (bouwkundige keuring), to check for hidden defects.
Instead of skipping these two protections, there are two ways of making your offer seem more attractive without taking a huge risk. If you are competing for a house with many other bidders, you should consider them.
The first is a new kind of insurance called โbidding with securityโ. Under this agreement, an insurance company agrees to pay the 10 percent penalty if for any reason you cannot secure a mortgage and have to pull out of the sale. This extra security is often accepted by estate agents because they can assure their sellers: if this deal doesnโt go through, we can claim the 10 percent, essentially replacing the financing condition.
Another option is known as a pre-approval, offered by brokers who have strong relationships with mortgage lenders, like Expat Mortgages. โAs in the UK, we bring the approval part earlier into the process,โ explains Kenneth Leenders, chief executive of Expat Mortgages. The client is pre-approved by looking at their financial situation, income, assets, and credit history so the only uncertain part is the property itself. In the three-day thinking time after a sales contract, you can have an official valuation to check it is worth what you have offered.
Unlock the Potential of Your Property with a Second Mortgage
In recent months, Expat Mortgages has seen more people taking out a second mortgage. This might be to take advantage of the propertyโs increased official value โ as prices have risen โ or to invest in sustainable building and renovations.
At Expat Mortgages, we can help clients apply for second mortgages and we have a new partnership with a sustainability-focused mortgage lender. This collaboration will provide our clients with a clearer understanding of sustainability options, costs, and potential returns on investment. Want to know more about this? Feel free to reach out!
Is new build for-you-build?
Looking for a house built on solid foundations, that is resilient to climate change? Expat Mortgagesโ experts have their eyes on the Park Valley development in Diemen. A second phase of building, now on sale, will create 59 apartments ranging from 50 to 149m2 in size.
The light, modern apartments, a stoneโs throw from Amsterdam, will be surrounded by green, with open-plan design, balconies and of course private bike spaces. You can buy a car parking space in the garage below, with and without electric charging.
Want to know more about this and anything else in this newsletter? Feel free to reach out!