During 2009 the Amsterdam housing market finally seemed to pick up again. It was quickly assumed that prices would stop falling – or in any case, that they wouldn’t fall much further. The stock markets were faring well too. All in all, the market finally seemed to be stabilising.

 

Unfortunately, it soon became clear that the crisis was not over. The slight market recovery at the end of 2009 may have given a misleading impression. Furthermore, one of the reasons for the pick-up was the temporary exemption from transfer tax granted for nationally listed buildings.

Various parties, including Rabobank and Bouwfonds, said that they expected to see a recovery this year. Nevertheless, in mid-2010,  the capital’s housing market continues to struggle.

 

The developments in the market seem to be unrelated to the political controversy surrounding proposals to restrict the mortgage interest tax deduction. Although it is understood that the beneficial tax arrangements in the Netherlands cannot go on forever, there is a clear view that limits should be phased in gradually. House owners should not suddenly find themselves unable to meet their financial obligations. On the other hand, it would seem wise to wait for the economic climate to improve before taking any action.

 

What is the situation at present? Prices have fallen in most market segments and houses have continued to become more affordable. However, there is increasingly a gap between the amount that buyers are able to afford or borrow and the prices that sellers want. House owners still find it difficult to accept that they have to sell their houses for less than a neighbour might have received for a less desirable property a couple of years ago. Transactions regularly founder over sums of a few thousand euros.

Furthermore, we regularly see that some popular houses are sold very quickly. These are the realistically priced houses that appeal to buyers, have been renovated or have a little something extra. And there remains a shortage on the supply side: the number of good houses on the market is low, demand is still high, and there are often many interested parties. This means that potential buyers have little time to think, that they end up clambering over one and another to clinch a deal, and that they often offer the asking price.

 

Once a house has been on sale for a number of weeks, the number of requests for viewings falls sharply. Buyers seem uninterested in houses that have been on the market for a while, even when the asking price is reduced. Sellers wish to avoid or limit the expense of having two houses at once and are more often willing to negotiate, creating the sense that it is really a buyer’s market.