The Dutch housing market is in a state of flux. Prices continue to rise, rental regulations are becoming stricter, and many people are struggling to find affordable housing. These factors have led to a striking trend: more and more Dutch citizens are choosing to emigrate and purchase homes abroad, with Spain being a particularly popular destination.
Changing Rental Regulations in the Netherlands – The Affordable Rent Act
The introduction of the Affordable Rent Act aims to regulate rental prices in the mid-range market, making it more accessible for tenants and reducing speculation in the housing market. While this policy has some positive effects for first-time buyers, it often works against renters due to several factors:
Why are renters at a disadvantage?
- Less attractive for investors
The Affordable Rent Act caps mid-range rental prices, making property investments less profitable for private landlords and investors.- Many landlords are now opting to sell their properties instead of renting them out, reducing the number of available rental properties in an already tight market.
- Decrease in rental housing stock
- Stricter regulations are causing many landlords to withdraw from the rental market or shift to selling their properties.
- This significantly reduces the supply of mid-range rental properties, increasing competition among renters.
- No incentive for new construction
- The act focuses primarily on existing rental properties and offers little incentive for developers to build new mid-range rental housing.
- Developers are instead focusing on building homes for sale or high-end rental properties, which face fewer restrictions.
- First-time buyers benefit, but not all renters
- Measures like the investment ban and Affordable Rent Act make properties more accessible for first-time buyers by reducing investor activity.
- However, those unable to buy, due to strict mortgage rules or personal circumstances, are left with fewer rental options.
House Prices in the Netherlands Will Continue to Rise
Increasing incomes and borrowing capacity
The Dutch economy remains resilient, with rising wages and low unemployment boosting household purchasing power. Specific adjustments to lending standards amplify this effect:
- More borrowing capacity for singles: New rules allow singles to borrow more, making them more competitive in the housing market.
- Incentives for energy-efficient homes: Buyers of homes with a high energy label often have access to extra financing, increasing the demand for these properties.
Falling mortgage rates
Mortgage rates in the Netherlands have been dropping since late 2023, making home loans more attractive and affordable.
- Lower monthly payments: With reduced rates, mortgages become more manageable, encouraging more people to purchase homes.
- Increased demand: The decline in rates makes buying more appealing than renting, further driving demand in the housing market.
Inflation and asset appreciation
Inflation is expected to persist, and fiat currencies like the euro and dollar continue to lose purchasing power. This drives up asset values, including stocks, crypto, and real estate.
- While property values may rise, inflation erodes some of the gains. For example, a 10% increase in property value paired with 8% inflation results in only a 2% real gain.
More People Are Leaving the Netherlands
A growing number of Dutch citizens are choosing to leave the Netherlands and start a new life abroad. This trend is driven by various factors, including rising housing prices, stricter regulations, and a desire to escape the high costs and fast-paced life in the Netherlands.
Why are more people leaving?
- Unaffordable housing market
- Rising home prices in the Netherlands make it increasingly difficult to find affordable housing. In countries like Spain, you get more value for your money.
- Regulation and tax burdens
- Stricter laws, such as the Affordable Rent Act, and increasing tax pressures make it harder for renters and buyers to live comfortably in the Netherlands.
- Better quality of life
- The sunny climate and relaxed lifestyle in countries like Spain are seen by many as a significant improvement over the stressful and hectic life in the Netherlands.
- Remote work opportunities
- With the rise of remote work, more people have the flexibility to live abroad while continuing their careers, making relocation an attractive option.
Torrevieja and Orihuela Costa Lead Property Price Increases in 2024
In 2024, the property markets in Torrevieja and Orihuela Costa, located on Spain’s Costa Blanca, have seen remarkable price increases. This trend is primarily driven by the growing popularity of these areas among foreign buyers, including a significant number of Dutch citizens.
Torrevieja
- In Q3 2023, 2,017 properties were sold in Torrevieja, a 2.4% increase compared to the same period in 2022.
- New-build property sales rose by 20.4% in the same period, with 670 units sold.
Orihuela Costa
- In January 2023, property prices in Orihuela increased by 18.5% compared to the same month the year before.
- New-build sales in Orihuela Costa grew by 25.2% in Q3 2023, with 528 units sold.
Torrevieja: A Hub for International Residents
Torrevieja is a unique city where nearly half the population consists of foreigners. Its international appeal attracts buyers from all over the world, including Dutch, British, and Scandinavian nationals. The city offers:
- A sunny climate.
- A cosmopolitan atmosphere.
- Affordable housing compared to other coastal regions.
Casa Capital – Rental Management and Real Estate in Torrevieja
Casa Capital, based in Torrevieja, assists Dutch and international clients in finding their dream homes on the Costa Blanca. The company offers:
- Guidance through the purchasing process.
- Professional rental management services.
With extensive experience in real estate and cleaning in both the Netherlands and Spain, Casa Capital understands the needs of property owners and renters. As demand for vacation rentals and long-term rental options grows, Casa Capital provides a comprehensive package to make your investment profitable.
Conclusion
The Dutch housing market is rapidly changing, prompting many to explore opportunities abroad. Spain, particularly the Costa Blanca region, offers excellent prospects for homebuyers and investors. With the expertise of companies like Casa Capital, the process of buying and renting properties becomes not only easier but also more profitable.
Ready to take a step toward Spain? Contact Casa Capital and let us help you turn your dream into reality.
