Residential real estate prices forecast change in the Netherlands 2017-2021

A quarterly pulse monitor expects the Dutch housing market to stabilize in 2021 due to the coronavirus. In January 2020, the source believed that the growth of residential property prices in the Netherlands would slow down in 2020 and 2021 due to the high increases seen in previous years. In October 2020, however, it turned out that home purchases increased significantly. This might be due to low mortgage rents. The price of Dutch residential property at the end of 2019 was approximately 344,000 euros. These developments came on top of other issues that were already prevalent in the Dutch housing market, such as the discussion about nitrogen and its effect on housing construction.

The effects of nitrogen on the price of a house

The source mentioned at the end of 2019, months before the coronavirus, there was already a lot of uncertainty whether their predictions would hold true. This had to do with the so-called “nitrogen decision” (in Dutch: stikstofbesluit) in May 2019. Simply put, a Dutch advisory body found that the domestic policy for nitrogen emission (formally known as Programmatische Aanpak Stikstof or Programmatic Approach Nitrogen) went against European rules. As of August 2019, a sizable share of the Dutch population was not familiar with this nitrogen policy. However, the advisory body’s decision led to an immediate stop to all construction in the country (amongst other things). By the end of 2019, this stop was still in place. For 2020, newly to be constructed houses have to comply to new rules regarding nitrogen emission. This puts new pressure on a housing market that already had to keep with increasing demand.

How about the housing market in Amsterdam?

In early April 2020, there were no predictions yet on the effects of the coronavirus pandemic for local housing markets in the Netherlands. Amsterdam, Haarlem and Haarlemmermeer (two areas surrounding the Dutch capital) were the cities and/or municipalities with the highest house prices in 2018. On average, a house in Amsterdam sold for over 115,000 euros more than a house in Utrecht. Amsterdam was also well above the average rents found in other cities. A house in Amsterdam had a rent of approximately 23 euros per square meter in 2019, whereas rents in Rotterdam costed roughly 16 euros per square meter. It should be noted, however, that rent changes in the Dutch capital are significantly lower than those found in Rotterdam and especially Utrecht.