After house prices dropped 20 per cent in the five years following the 2008 financial crisis, economic recovery and strong growth predictions resulted in renewed consumer confidence and along with consistently low interest rates, a surge in foreign investment.
Prices have been rising – steeply. The Amsterdam market soared to a new level in 2016, with prices reaching as much as 7% up on their pre-crisis peak.
The Netherlands’ unusual mortgage system, where buyers are permitted to borrow more than the value of the property, is another reason for the surge in house prices. However, the limit is now being reduced yearly by 1% until it reaches 100% in 2018.
In addition, buyers are not required to make a down payment, which in cities such as London, is often enough to push first-time buyers out of the market.
The Amsterdam market in particular has also seen a surge of international investors seeking to take advantage of their strong rental yield figures. With a lack of stock and increased international and domestic demand, the market values show no sign of slowing down.
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