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 :-)