It might almost be Blue Monday but there are reasons to be bright about buying a house in 2024. Kenneth Leenders from Expat Mortgages explains the positive changes coming to the Dutch housing market in 2024.
Housing experts believe it’s important to look realistically at the situation and your own circumstances, then make smart decisions that could unlock your dream home in the Netherlands.
We can easily look at the more negative aspects of the Dutch housing market, but some positive things are happening too. There are some changes with borrowing capacity: in general people are able to borrow a little less, but some groups have more benefits in 2024. Moreover, interest rates for mortgages have been going down and the gap is closing in terms of higher prices for the new build market.
Mortgage optionsThe first changes in 2024 are regarding what you can borrow. Although buyers with two incomes can borrow 5% less in 2024 if their income remains the same, there are more options for single people. They can borrow €16.000 more if they earn at least €28.000 a year.
In 2024, for people under the age of 35 who are buying their first home, there is no transfer tax for homes up to €510.000. There’s also a slight increase in the level of the National Mortgage Guarantee (NHG), which covers a loss you might make if you are forced to sell under specific circumstances. This amount has increased from €405.000 to €435.000.
Energy labelThe energy efficiency of houses will also have more of an impact on borrowing – so, for a well-insulated home, you might be able to borrow up to €50.000 more to account for the higher price of this kind of property. There are obligatory energy labels for properties in the Netherlands ranging from A++++ to G and for places with a C or D label, for instance, a buyer can borrow €5.000 more in a basic loan.
If, however, the wind blows merrily around the windows and your house is not well-insulated, you will be able to borrow more to renovate them. For houses with the lower energy labels (E, F and G), this amount will be €20.000. This is a big increase from the €9,000 that you could borrow in 2023. The better the energy label of the house, the less you can borrow to make the home more energy-efficient.
More and more banks or mortgage lenders are willing to give discounts on rates depending on how high the energy label is, and that’s a really positive thing.
New buildThe Netherlands is estimated to have 390.000 more house seekers than there are homes. This has sparked the start of a massive national programme to build 900.000 properties by 2030. Although there have been some issues with new build projects selling recently, this sector is actually a real plus for expats.
Average property prices slumped 6% last year in 2023. However, since June 2023, they have been creeping back towards the same prices as in 2022. Demand is going up, more people are moving towards the buying market again and placing bids, even overbidding again. The less positive thing is that supply is still lagging quite significantly. There is a solution, however, and that’s the new build market.
It might feel like a long wait for a house to be built but it could still be in your interests to consider this sector as the price premiums for new build housing units is getting smaller. There are also signs that buy-to-let houses are being put on the market, which means more supply for buyers but higher rental prices.
However, more and more people are moving towards new build projects. With more demand, more projects are going to get off the ground and be delivered faster. Additionally, looking at sustainability, new build properties won’t have maintenance costs and you can have a say in how they look. Pushing more people to this side of the housing market would be positive.
Climate riskOne thing that is worth checking, whether you buy a new or old house, is how vulnerable it is to climate change. The Netherlands is becoming hotter and wetter each year, so make sure to check that your future home is protected from floods. You should also determine that the property is insurable if it is located in a flood plain and that you have examined the foundation with your own expert or seen a foundations report.
The AFM financial authority has recommended that “climate risk” is priced into property value. Furthermore, many houses could be worth less because of these future costs. It is thus recommended that you have a building and foundation inspection done on the property first, otherwise you shouldn’t buy.
The foundation is literally the foundation of your house, and you should get it checked out as you would your roof. If you discover that there is something wrong, you may have it deducted from the price.
Entrepreneurs and freelancersThere are other things to bear in mind too. After a Dutch bank was fined for the way it granted some mortgages to entrepreneurs or freelancers, lenders might be more cautious. Additionally, the 30% tax ruling is being restricted for scarce, international talent. For groups like entrepreneurs, it’s not going to get easier but they are needed to drive the Dutch economy, so they deserve the chance to get a mortgage as well.
Housing prices stabilisingAs mentioned earlier, in 2024, the Dutch housing prices will creep back up to similar levels as in 2022 and will stabilise there for a period. This is another positive after the turbulent years of the past. Because prices are going up, it is still a good time to buy if you see the opportunity.
For all of your questions on buying a home in 2024, join the Expat Mortgages webinar on January 10. They will give you tips on how to navigate the Dutch housing market and learn more about mortgages.