The coronavirus has proven that size doesn’t matter: hard times are coming to big and small countries alike. In the Netherlands, the pandemic has accelerated the approach of a looming housing crisis that can only be dealt with at someone else’s expense…
The economy has taken a hit.
The Netherlands took the pandemic seriously. A full lockdown was set in the wake of the first infections, and vaccinations began as soon as the drugs appeared on the market. Now 67.8% of the population has been vaccinated.
The end of the coronavirus crisis looms on the horizon. For the Dutch economy this is a sign of widespread recovery. Social life is returning to normal, which gives hope that the consequences will not be as severe as expected.
According to the CPB (the government’s Bureau for Economic Policy Analysis), the Dutch economy is expected to decline by 3.7% in 20202. Technically, this is the most serious setback since World War II. But when the pandemic only began, analysts predicted a much larger correction (by 7-8%). Therefore, we can say that the economy has withstood the blow with dignity. According to the optimistic scenario, the lost profits will be compensated by the third quarter of 2022.
Housing prices are rising at a breakneck pace
At the end of the second quarter of 2021, housing prices rose 20%3. And this is a record figure for the last 20 years.
The average cost of property in the Netherlands for the first time in history has exceeded € 400 thousand and buyers of private homes, demand for which jumped because of the quarantine, paid on average € 618 thousand, or 23.4% more than a year earlier.
There is a serious social problem. Analysts De Hypotheker calculated that the average Dutchman alone with an income of € 36.5 thousand per year has almost no chance to buy a home, even taking into account the mortgage credit4. Only 3% of the properties for sale nationwide would fit within the budget of this social group. Families, where the average salary of two people receive, 36% of offers are available, and in practice probably even less, because buyers, competing with each other, are forced to pay more than the sellers asked in the ads.