The housing market in Amsterdam was overstrained in the first quarter as we have rarely seen. Prices within the ring rose by 3% compared to the fourth quarter of 2019. The average overbid also increased in the same period from 5.7% to 6.4%! So the Corona virus did not affect house prices in Amsterdam in Q1.
The future of the housing market in Amsterdam in the Corona virus era
Many new offers
The Corona crisis did cause a rush of additional applications in the last three weeks. We are a sounding board for many of our clients when it comes to thinking about the expected developments in the Amsterdam housing market. The uncertainty about the timing of the next step in one's housing career has increased enormously. There are many people who have decided to bring the sale forward because the market is currently good. The future is by definition uncertain and therefore many clients choose to put their flat or house in Amsterdam on the market quickly..
Part of the searchers drop out but activity increases
We see a reduction in the number of seekers wanting to buy in Amsterdam. The uncertainty about their (own) company or flexible contract is leading some people to put their search on hold for the time being. We therefore see a certain drop in demand. However, the number of applicants per house was extremely high in the past quarter, so this correction should not directly hurt the market in 2020.
The housing market in Amsterdam has a strong foundation consisting of three factors:
1/ Amsterdam is a magnet for national and international companies and for young, well-educated people. The influx of new people see graph which shows that the influx is accelerating
2/ There is a huge shortage of owner-occupied homes, and this shortage is only increasing because building production is not keeping up with the new influx, and according to the municipality's new standards, only 20% of building production is intended for sale. The rest of the production is allocated to social and medium-sized rented housing.
3/ The mortgage is very low and despite the expectation that the interest rate will rise slightly in the coming period, it will still remain at historically low levels. As long as Southern Europe is in trouble and the financing deficit remains too high in relation to the GNP, the European Bank will have to keep interest rates low.
On balance, the expectation for the coming year 2020 of the Amsterdam housing market is that there will be a better balance between supply and demand as a result of reduced numbers of seekers and increased supply. The uncertain economic outlook plays a role particularly in the higher segment. The price segment under €750,000 will remain fairly robust in 2020. In the absolute top segment, we expect to see greater reticence among buyers.
How are things in the various districts of Amsterdam?
See for the price development in the Centre, Old South, Old West, De Pijp, Rivierenbuurt.
