The Netherlands has taken the pandemic seriously. A full lockdown has been established since the first infections, and vaccination has started immediately after the appearance of drugs on the market. Now 67.8% of the population is vaccinated.
The end of the coronavirus crisis looms on the horizon. For the Dutch economy, this is a sign of a large-scale recovery. Social life is normalizing, which gives hope that the consequences will not be as serious as expected.
According to CPB (the State Bureau of Economic Policy Analysis), the decline of the Dutch economy is estimated at 3.7% in 2020. Formally, this is the most serious failure since the Second World War. But when the pandemic was just beginning, analysts predicted a much larger correction (by 7-8%). Therefore, we can say that the economy has adequately withstood the blow. In accordance with the optimistic scenario, the lost benefits will be compensated by the third quarter of 2022.
According to the results of the second quarter of 2021, housing has risen in price by 20%. And this is a record figure for the last 20 years.
The average cost of a property in the Netherlands for the first time in history exceeded €400,000. And buyers of private homes, the demand for which jumped due to quarantine, paid an average of €618,000, which is 23.4% more than a year earlier.
A serious social problem is brewing. Analysts at De Hypotheker have calculated that the average single Dutchman with an income of €36,500 a year has virtually no chance of buying a home, even with a mortgage loan. Only 3% of the objects throughout the country will fit into the budget of this social group. For families where two people receive an average salary, 36% of offers are available and probably even less, because buyers are forced to pay more than sellers asked for in ads due to a serious competition.
A demonstration was held in Amsterdam in September calling for an end to the housing crisis. About 15,000 people took part in it. The action was organized by the Woonprotest group, which is supported by more than 200 organizations, including political parties, trade unions and housing corporations, as well as private activists.
On the same day, the police detained 61 people for trying to seize an empty building. Squatting has been illegal in the Netherlands since 2010. The participants of the action tried to justify themselves to the public and stated that the house they wanted to occupy had been empty for several years and was one of 116 properties owned by a large landlord.
Politicians are forced to react. The budget for 2022 provides for an additional billion euros for the construction of affordable housing.
Starting next year, Rotterdam, The Hague, Eindhoven and Haarlem are planning to introduce a law prohibiting private investors from buying housing for rent. It is investors who are most often blamed for the increase in real estate prices, which is becoming less affordable for the population every year.
Amsterdam and Utrecht approve the ban, but do not introduce a similar one yet. The metropolitan administration plans to introduce an obligation to live in the purchased property, and in order to maintain the level of rent, the city council will buy out social housing.
In recent years, the Dutch market has become attractive for capital investment due to low interest rates and the general increase in housing prices in the country. At the end of 2020, private investors bought 40% of properties in major cities, according to the Dutch Land Registry. This increased the housing shortage that already existed on the market before.
The pandemic helped to contain investment demand. In the first half of 2021, €4 billion was invested in Dutch real estate. This is 38% less than a year earlier, and at times inferior to the results of the same period in 2019 (that is, before the pandemic), when €7.7 billion was received in real estate. According to Cushman&Wakefield analysts, the reason is not only the general uncertainty caused by the corona crisis, but also that there are few available projects for investment on the market.
Those who invested in Dutch square meters 3 uears ago are happy to see how their capital is growing. In 2018, the average price of the object was € 263,000, and now in 2021 it's €410,000.
But what to do with the rest of the private investors, who are now under the wrath of the Dutch public, is no longer obvious. Here are the conclusions that arise from the analysis of the current situation.