Property investors are avoiding buying property in the Netherlands because they fear the property market is yet to hit rock bottom
The Netherlands are the only country in Europe that is still creating its own new land, however, property prices in the Netherlands are continuing to fall alarmingly, putting off purchasers and investors alike.
Property prices of residential properties in Holland are at the same level as they were 10 years earlier, and are still falling, reflecting the stagnant housing market in the country.
According to a joint publication by Statistics Netherlands and the Land Registry Office, prices of existing owner-occupied residential properties in The Netherlands were on average 7.6% lower in April 2013 than they were in April 2012 and 19.5% down from the peak of the global property market of August 2008.
Residential property prices are falling as a consequence of ultra low demand from property buyers.
Official figures reveal that only a total of 29,644 residential property sales were registered in the country during the first four months of 2013, compared to the same period last year.
The Financieele Dagblad reported recently that Dutch banks’ housing market specialists would no longer be making predictions over the decline in residential property prices.
Last year, the banks predicted a further fall in Dutch property prices in 2013 between 7% and 10%.
Sources told the paper the chief executives of the three big banks – Gerrit Zalm of ABN Amro, Jan Hommen of ING and Piet Moerland of Rabobank – agreed their banks would not to make any more property market predictions. ‘Bottoming out’ would be as far as they would go, the paper says.
Sources told the paper this policy has also been discussed with cabinet ministers, although this has been denied by a spokesman for housing minister Stef Blok. Nevertheless, it is in the government’s interest to reduce pessimism in the housing market, the paper said.
It is a real shame that property prices continue to freefall because the Netherlands attract an average of 3 Billion tourists a year who require accommodating, making investment a viable alternative with a healthy return, and if there isn’t enough available land, the country can always reclaim more from the sea, however, Dutch banks have little faith in their own economy and remain reluctant to lend.
Apartments are preferred in the main cities especially in the Dutch capital, Amsterdam, where the tourist trade continues to generate revenue despite the Eurozone crisis and a lack of faith in the overall property market. Landlords are seeing healthy returns on their investments and short term rental accommodation ranges from 80 – 200 euros a night. Renting out a studio apartment for 1 week out of every month covers the mortgage cost of the rest of the building too, so property profit is very lucrative for smart landlords with quality rental properties.
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