Despite the pandemic, purchase prices on the Dutch housing market continue to rise to record heights

Now that the data of the last quarter has been analysed, we are closing a special year, a year marked by the corona pandemic. With international travel bans, mandatory lockdowns and huge aid packages, the economic bill is waiting. Expectations were that this would also bring down prices on the housing market. The opposite is true. In the cities and areas surveyed by FRIS, the transaction price per square metre increased by 10%. In the rental market, we see some influence of the corona crisis: in cities that attracted many expats and tourists pre-corona, we see a decrease in rental prices. This is especially noticeable in the more expensive segment, where expats could pay the rents. And Airbnb apartments that are now offered for rent or on the owner-occupied market.

Capital is still available and transactions in new and existing homes remain at a satisfactory level. Nor is there yet any strong effect to be seen in the price level. The new figures for 20Q4 give no immediate cause to conclude that there is a strong trend reversal. In particular, the housing markets of larger cities in the Netherlands still appear to be holding up strongly, especially in the owner-occupier market. There is, however, evidence of declining consumer confidence, which may have a negative influence on willingness to buy and purchasing opportunities in the future.

As a result of the corona crisis, we also see that the number of inhabitants is not growing as fast, especially in cities that experienced a large influx from abroad before the corona crisis. As tourists stayed away due to international travel bans and restrictions, many Airbnb owners switched to renting out or selling their homes permanently. Expats also moved away, leaving high-end rental properties empty. As many Dutch people can hardly afford such rents or often choose to buy a home instead, prices in this rental segment have fallen. This has had a negative impact on rental prices in these cities (see figure 6).

In cities where rents were high pre-corona and where expats and tourism were flourishing, we see a decrease in median rents (see figure 6). Square metre prices have fallen particularly in the higher segment with rents higher than €1,500 per month. In the segment up to €1,500, we still see an increase in rents per square metre per month in most cities Despite the rent reductions in the cities Amsterdam, Utrecht, The Hague, Leiden and Haarlem, square metre prices per month remain the highest here. Amsterdam also has the highest square metre prices at rent level with €23.30 in the fourth quarter of 2020, see also Figure 7.