Buying a Home in Amsterdam the Pros and Cons
If you’re an expat and you’re thinking about buying a home in Amsterdam then shame on you! According to the Dutch media, expats are to blame for both the expensive rental prices in Amsterdam and the increasing cost of buying homes too. If the streets of Amsterdam were overrun with homeless expats I don’t think the Dutch media would be happy about that either. The reality is that the reasons for the incredible growth in property prices in Amsterdam are numerous. Including some of the following:
- More than half of all properties in Amsterdam are social housing
- The growth of Airbnb and B&B hotels has further reduced available housing
- Hedge funds and other wealthy investors buying up property in Amsterdam for rental purposes
Expats are but one of the factors to blame for the high costs of buying property in Amsterdam.
Which brings me to the subject of today’s post.
1. Cons, the cost
Let’s address the elephant in the room immediately! Buying property in Amsterdam is bloody expensive! In 2008, the average asking price for a property was 370,792 euros. The average cost per square meter is now over 5,000 euros, with an average property price of just under 600,000 euros.
The reality is that to afford to buy a property in Amsterdam you really have to not only have a bloody good income, you also need to have a lot of savings too as the amount that banks will allow you to borrow is limited to 100% of the value of a property. If you have a double income and some savings it’s definitely an advantage. To get an idea of how much you can borrow it’s always worth looking at a mortgage calculator.
2. Pros, no more renting
If you’ve already been living here for a few years and are still renting then you know that you’re just burning cash. Yes, the advantage of renting is of course that if you decide to leave the country soon then it’s easy like a Sunday morning to leave. (Sorry Lionel). On the other hand as an expat:
- You’re probably being charged too much rent
- The Amsterdam rental market is so overheated right now that some landlords are making ridiculous demands such as charging their tenants when they have guests staying the night
- Net mortgage repayments including tax rebates will often be less than your paying in rent
- Getting rental security deposits back from a lot of private landlords is a lot of hassle!
I’d also add that paying rent long-term is just money down the drain. In my humble opinion, it’s much better to own a 40 square meter apartment than paying rent for a place twice the size in the same neighbourhood.
3. Pros, property is an excellent long-term investment
As an expat, over the years you’ve probably been told that the Amsterdam property market is really just a bubble and prices will come down soon.
Well, people have been saying this for many years, in reality, look at what’s actually happened to house prices in Amsterdam. Property prices can, of course, fall at any time but the reality is that what with all the kut expats 😉 social housing, and investors buying up property for rental, demand is likely to continue to outstrip supply.
4. Cons, if you own a property you might be stuck here
Of course, a common concern for expats is that if they buy property in the Netherlands what if they decide to rot op naar hun eigen land? Of course, there are options. If you own a property in Amsterdam you’ll never have a problem subletting it, but of course, it’s best to discuss this and other concerns with a mortgage broker, makelaar or financial advisor.
5. Pros, it’s your home you can do pretty much what you like with it
As a former renter who bought their own home here the best thing about owning a property is that it’s yours and you can decorate it how you like. If you want to kit your place out with leopard print carpet, paint the walls bright pink and fit a revolving door in your bedroom it’s up to you! Doe maar!
On Monday the 13th of May, there’s a free event in Amsterdam at Restaurant Moer where you’ll be able to speak to various Dutch experts in mortgages, property, renovations and legal matters. To register for the event you can sign up here.
No renters were hurt during the writing of this post.