Dutch housing market
Tags: personal
Some people are surprised that I live in a rented house with my family instead
of in a house we bought. “Surprise” is surely an improvement on “ridicule”:
people used to pronounce me utterly insane and a thief of my own pocket for
not buying a house. Even people at the same age in my bible study group where
you’d at least expect some social skills...
With a bit of recession and slowly-sinking house prices, at least the ridicule
has let up, probably partially replaced by worries about their crippling
mortgage on a house that’s not rising 5% in price every year anymore.
Some observations on the Dutch housing market from a personal perspective:
- The price of a house has no relation to the actual inherent value of the
property. The price is that which the buyer is willing to pay. If others
overpay by 60%, you have to overpay by 62%.
- Someone compared it to a pyramid scheme. Everyone takes a crippling
mortgage as they’ll be able to pay it by selling the house dearly to another
victim after a few years. Which works admirably when you have a house at
the start of the madness (at the top of the pyramid scheme, so to say), but
it has disadvantages when you buy an overpriced house and the market starts
to adjust...
- Oh! The horror! The average house price in the Netherlands dropped a few
measly percent compared to last year! Well, they rose more than those few
percent per year in the 20 years before that, so I’d say some 30% adjustment
is in order.
- 30% reduction in housing prices? That cannot ever happen. Well, it
happened when my parents bought their second house somewhere in the early
80s.
- Everyone seems to have dual incomes. And as the price that gets paid is
what you are able to pay, the average house price reflects dual incomes.
We don’t have a double income. I have a reasonable salary. Not a huge
salary. So I cannot ever hope to compete for a house in today’s
still-inflated market. The best I can do in the city where I live now
(Nieuwegein) is some two-room apartment somewhere on the 7th floor. With a
family of 4. I’ll just stick with my 4-room rented house with a small
garden, thank you.
- We could use an extra room, though, to give the boy and girl each a
separate (doesn’t need to be big) bedroom. Options? Look for another
for-rent house. Make a 50% leap in income. Wait for the housing market to
break down. Work completely from home and move to the (much cheaper)
countryside. For the moment I’ll just stay put :-)
