Date: 9 November 2021

Prices in Amsterdam remain (as in the rest of the Netherlands) but rise by an average of 17% from €6,140 to almost €7,200 per square meter. Within the Ring the average square meter price is € 8.000,-. If prices continue to rise at this rate, as a real estate agent in Amsterdam we expect the € 10,000,- per m² limit in Amsterdam within the Ring Road to be exceeded sometime in the spring of 2022. All in all, a worrying development.

Problematic housing market

The housing market is becoming a problem for more and more people to continue growing, but also to buy their first home!

Less supply

There are currently (end October 2021) 1,400 homes available on Funda. The number of transactions has decreased by 20% compared to Q3 2020. There are many people who do want to move but have difficulty finding the next house. This group of people therefore waits with putting the house up for sale until a house has been purchased.

Purchasing is difficult and takes a long time. This reduces the number of homes on offer. Fewer homes for sale, while demand remains as high as ever, naturally puts extra pressure on prices. New construction could bring relief, but the number of homes in the pipeline is too small to make a real difference.

So why not live outside the ring of Amsterdam?

Most people would like to live within the Ring Road and that is, of course, perfectly understandable. However, this is becoming increasingly difficult for less people. Living within the Ring Road is becoming less accessible for people with an average income. There are still relatively affordable neighbourhoods in Amsterdam. In Amsterdam Zuid-Oost a square metre costs an average of € 4,400, a difference with prices within the ring of € 3,600 per square metre. Also Nieuw West (€ 5,500 per sq.m.) and Amsterdam Noord (€ 5,550 per sq.m.) are still somewhat affordable. 

Mortgage rates rise slightly

Financial experts expect a very small increase in mortgage rates. The ECB is very reluctant to raise interest rates because of the weakness of the economies in southern Europe. On balance, therefore, we do not expect a moderating effect on house prices from a slight rise in interest rates.

Correction in the housing market on the way?

We are afraid not. The underlying factors will not change in our view. The most important factors are: 

• Lack of supply
• New arrivals - national and international. Amsterdam is an economic and cultural magnet attracting many people
• Low mortgage interest rates

Wouter Thöne
EOwner Director Amsterdam at Home Brokers