The housing market after three months of intelligent lockdown
Is it a good time to buy? The answer is not that simple, since everyone’s circumstance are different.
If you are looking for a long-term investment, this could be the moment. Potentially you will have less competitors from other buyers. However, in that perspective, it is interesting to hear that the number of young home buyers under the age of 35 increased by 40 percent during the months of March, April and May, compared to the same period last year.
Mortgage broker ‘De Hypotheker’ reported that almost a third of mortgage applications during the coronavirus crisis came from people of this age group, and the proportion of mortgage applications of the age group 25 and under, even increased by 150 percent.
For a long period of time it was very difficult for starters to find an affordable home, especially in the big cities. It seems that a turning point has arisen due to the corona crisis.
The sudden increase of young home buyers has a number of causes. Although the housing prices are still increasing, the uncertainty around the coronavirus and the increasing mortgage rates, are one of the reasons of the sudden increase of young home buyers. The housing supply is growing by 10% and it seems many starters now want to take their chance with or without financial support from their parents or using their own savings. Another reason is, according to mortage advisor “Hypotheek Visie”, that more people are uncertain about their job. This might be a last opportunity in the foreseeable future to still be able to get a mortgage, which you can only get if you have an employment contract.
In the rental market realtors notice as well that, after three months of the intelligent lockdown, there is considerably more inventory on the rental market. Up to 30% in the Amsterdam region. According to the NVM (the Dutch realtor association) the decreasing Airbnb use seems a logical explanation. And the coronavirus brought tourism to a stop. In combination with the announcement of the municipality of Amsterdam, that will imply more strict rules for renting out through Airbnb and the requirement of a license, might have led to the decision of landlords to rent out their properties for a longer period.
This much inventory is causing that prices in the rental market are slowly going down and future tenants taking this opportunity to negotiate on the rental price.
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- 20 July 2020
- Posted by: Expat Management Group
- Category: Insights