After four years of housing market slump, house prices in the Netherlands continue to fall in early-2012.
During the year to end-March 2012, the prices of existing homes sold in Netherlands fell by 4.7%, according to Statistics Netherlands (CBS). The average property price was €230,341 in March 2012. Over the same period:
This is supported by data from the Dutch Association of Real Estate Agents (NVM), showing that the average price of property sold fell by 4% y-o-y in Q1 2012, to €214,000.
House prices in the Netherlands are expected to fall by another 5% this year, amidst economic recession, according to the NVM. Almost all cities and municipalities in the country have seen their house prices falling in the first quarter of 2012. Among the major cities, Amsterdam (-3.9%) and Maastricht (-3.8%) have seen the highest house price falls, according to the CBS. Nationally, house prices fell by 2.8% in Q1.
After almost 15 years of housing boom, the Dutch housing market started to become weak in 2008, mainly due to the global financial meltdown.
The Dutch economy is projected to contract by 0.5% in 2012. The economy entered recession in Q4 2011, when real GDP shrank by 0.6% both on a yearly and quarterly basis.
During the year to end-March 2012, the prices of existing homes sold in Netherlands fell by 4.7%, according to Statistics Netherlands (CBS). The average property price was €230,341 in March 2012. Over the same period:
- The average purchase price of single-family dwellings fell by 6.4% to €247,206
- The average purchase price of apartments dropped 4.9% to €183,213
This is supported by data from the Dutch Association of Real Estate Agents (NVM), showing that the average price of property sold fell by 4% y-o-y in Q1 2012, to €214,000. House prices in the Netherlands are expected to fall by another 5% this year, amidst economic recession, according to the NVM. Almost all cities and municipalities in the country have seen their house prices falling in the first quarter of 2012. Among the major cities, Amsterdam (-3.9%) and Maastricht (-3.8%) have seen the highest house price falls, according to the CBS. Nationally, house prices fell by 2.8% in Q1.
After almost 15 years of housing boom, the Dutch housing market started to become weak in 2008, mainly due to the global financial meltdown.
- In 2008, house prices fell by 5.3% (-7.5% in real terms)
- In 2009, house prices dropped by 1.5% (-2.4% in real terms)
- In 2010, house prices rose slightly by 1% (-0.7% in real terms)
- In 2011, house prices dropped by 3.8% (-6.2% in real terms)
The Dutch economy is projected to contract by 0.5% in 2012. The economy entered recession in Q4 2011, when real GDP shrank by 0.6% both on a yearly and quarterly basis.
Analysis of Netherlands Residential Property Market »
RENTAL YIELDS
Last Updated: Jul 15, 2011
Gross rental yields on rental apartments in Amsterdam are moderate, at around 6% on 70 square metre (sq. m.) apartments. Yields fell in a very typical downwards-sloping rental yield curve as apartment sized rise. The larger the apartment, the lower the gross rental yield. This is a typical phenomenon all over the world.
Apartments of 250 sq. m. return a gross rental yield of 4.4%, which is not bad for apartments that size.
Gross rental yields on apartments in the Hague are somewhat higher, and the returns can be considered quite attractive. Apartments of 85 sq. m. return rental yields of nearly 7%. Apartments of 200 sq. m. have yields of around 6%. This matches the pattern we have notices in previous years, in which yields in The Hague are higher than those in Amsterdam.
Apartments of 250 sq. m. return a gross rental yield of 4.4%, which is not bad for apartments that size.
Gross rental yields on apartments in the Hague are somewhat higher, and the returns can be considered quite attractive. Apartments of 85 sq. m. return rental yields of nearly 7%. Apartments of 200 sq. m. have yields of around 6%. This matches the pattern we have notices in previous years, in which yields in The Hague are higher than those in Amsterdam.
TAXES AND COSTS
Last Updated: Oct 06, 2011
Rental Income: The income tax on renting residential property is quite high, though the tax is not really an income tax. In reality it is a flat tax, with 30% levied on the assumed rental yield, the basis of assumption being that a rental yield of 4% is made on the assets. In effect, an annual tax of 1.2% is imposed on the value of the assets. If the rental property yields more than 4%, the proportionate tax rate is lower.
Capital Gains: For the sale of real estate that was used as part of a rental business enterprise, capital gains are taxed as part of income in Box 3 i.e. 30%.
Inheritance: Wealth acquired by inheritance from an individual who has properties in the Netherlands is subject to inheritance tax. Different rates apply, depending on the relationship between the heir and the testator where there are three categories.
Residents: Residents are taxed on their worldwide income.
Capital Gains: For the sale of real estate that was used as part of a rental business enterprise, capital gains are taxed as part of income in Box 3 i.e. 30%.
Inheritance: Wealth acquired by inheritance from an individual who has properties in the Netherlands is subject to inheritance tax. Different rates apply, depending on the relationship between the heir and the testator where there are three categories.
Residents: Residents are taxed on their worldwide income.
BUYING GUIDE
Last Updated: Nov 08, 2006
Total transaction costs are between 10.5% and 13.74% of the total dwelling price for existing houses, which is moderate by international standards. The bulk of these costs are paid by the buyer, including the Transfer Tax (6%), legal fees and registration fees. Real estate agent’s commission at 2% to 4% (plus 19% VAT) is shared between buyer and seller.
If the property is newly constructed (or less than two years old) the Transfer tax is replaced with the 19% VAT.
If the property is newly constructed (or less than two years old) the Transfer tax is replaced with the 19% VAT.
LANDLORD AND TENANT
Last Updated: May 22, 2008
Dutch rental market practices are pro-tenant.
Rent: Landlords can set the rent freely and adjust the rent, for properties above the ‘liberalization rent limit’ of €604.72 per month. A deposit of two to three months is customary.
Tenant Security: The most dangerous aspect for a landlord in the Netherlands is that once a property has been rented, tenants are almost impossible to evict. The basic Dutch rental contract is one of unlimited duration. Landlords can only give notice in strictly defined cases, and it is extremely difficult for owners to evict tenants once they are established.
Rent: Landlords can set the rent freely and adjust the rent, for properties above the ‘liberalization rent limit’ of €604.72 per month. A deposit of two to three months is customary.Tenant Security: The most dangerous aspect for a landlord in the Netherlands is that once a property has been rented, tenants are almost impossible to evict. The basic Dutch rental contract is one of unlimited duration. Landlords can only give notice in strictly defined cases, and it is extremely difficult for owners to evict tenants once they are established.
ECONOMIC GROWTH
Last Updated: May 07, 2012
Bleak outlook for the Dutch economy
The Netherlands, long one of Eurozone’s strongest economies, may now be succumbing to the problems afflicting the rest of the region. The rise of populist protest suggests that all is not well, in a country with one of the Eurozone’s lowest unemployment rates, at under 5%.
The conservative government of Prime Minister Mark Rutte collapsed this April 19, 2012, over its failure to agree on budget cuts and austerity measures with its right wing political ally, the Freedom party of euro-skeptic Geert Wilders.
Mr. Rutte, in effect a caretaker prime minister since his resignation, faces a general election in September 2012.
The Dutch economy is expected to contract by 0.5% in 2012, with consumption depressed amid falling house prices and government austerity measures.
The economy entered recession in Q4 2011. Real GDP shrank by 0.6% both on a yearly and quarterly basis. The country’s real GDP growth was 1.3% in 2011, after growth of 1.6% in 2010.
After the global financial meltdown hit, in 2009 the Netherlands’ GDP contracted by 3.5%. It was heavily affected by a 16.5% drop in exports, since two-thirds of the Netherlands’ economy relies on foreign trade.
Unemployment in the Netherlands is now rising. From an average of 3.46% from 2007 to 2009, the country’s unemployment rose to 4.46% in 2010 and 4.5% in 2011. In 2012, the percentage is expected to rise to 5.5%, according to the IMF.
Mr Rutte promises budget cuts of €16 billion (US$20 billion) to bring the country’s deficit in line with EU rules. During the recession, the government was forced to boost the economy through stimulus programs and bank bailouts, which resulted in a budget deficit of 4.6% of GDP in 2009, 5.1% of GDP in 2010 and 4.8% in 2011. As a result, the country’s debt rose to 65.2% of GDP in 2011, compared with 62.9% of GDP in 2010.
The Netherlands experienced uninterrupted growth for 26 years from 1982 until 2008, with an unprecedented boom in the latter half of the 1990s. There was low inflation, strong exports and virtually no unemployment. The economy grew by an average of 2.8% annually from 2004 to 2007.
One legacy of the boom years was huge mortgage debt, which now stands at well over 100% of GDP, among the highest in the eurozone.
The conservative government of Prime Minister Mark Rutte collapsed this April 19, 2012, over its failure to agree on budget cuts and austerity measures with its right wing political ally, the Freedom party of euro-skeptic Geert Wilders.
Mr. Rutte, in effect a caretaker prime minister since his resignation, faces a general election in September 2012.
The Dutch economy is expected to contract by 0.5% in 2012, with consumption depressed amid falling house prices and government austerity measures.
The economy entered recession in Q4 2011. Real GDP shrank by 0.6% both on a yearly and quarterly basis. The country’s real GDP growth was 1.3% in 2011, after growth of 1.6% in 2010.
After the global financial meltdown hit, in 2009 the Netherlands’ GDP contracted by 3.5%. It was heavily affected by a 16.5% drop in exports, since two-thirds of the Netherlands’ economy relies on foreign trade.
Unemployment in the Netherlands is now rising. From an average of 3.46% from 2007 to 2009, the country’s unemployment rose to 4.46% in 2010 and 4.5% in 2011. In 2012, the percentage is expected to rise to 5.5%, according to the IMF.
Mr Rutte promises budget cuts of €16 billion (US$20 billion) to bring the country’s deficit in line with EU rules. During the recession, the government was forced to boost the economy through stimulus programs and bank bailouts, which resulted in a budget deficit of 4.6% of GDP in 2009, 5.1% of GDP in 2010 and 4.8% in 2011. As a result, the country’s debt rose to 65.2% of GDP in 2011, compared with 62.9% of GDP in 2010.
The Netherlands experienced uninterrupted growth for 26 years from 1982 until 2008, with an unprecedented boom in the latter half of the 1990s. There was low inflation, strong exports and virtually no unemployment. The economy grew by an average of 2.8% annually from 2004 to 2007.
One legacy of the boom years was huge mortgage debt, which now stands at well over 100% of GDP, among the highest in the eurozone.
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