COVID-19 • Nieuws van bedrijven
The impact of the Covid-19 pandemic on the housing market in Amsterdam, to buy or not to buy?
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Over the past few years, relocation packages have changed.
Fewer international newcomers receive an allowance for housing and most of these have to cope with the reality of the real estate market without having any prior knowledge or experience in that area. For international newcomers, housing is a recurrent theme and a major topic of interest. Throughout the entire relocation journey, a common consideration is whether to rent versus to buy, as well as vice versa: to sell or to rent out… What will happen to the real estate market in the Amsterdam region? Will the prices eventually go down?
From a global real estate perspective, current big data from Funda shows that the total number of searchers on their website is higher than before this crisis. A survey among Funda visitors shows that confidence in the housing market remains steady.
The vast majority of consumers still indicate that Covid-19 has not affected their plans for the purchase or sale of real estate. In fact, week 18, near the end of April, shows these percentages to even be much higher than they were in week 12, which was mid-March:
• The number of respondents setting out to buy a house whose plans remain unchanged increased from 52% to 60%,
• For house owners looking to relocate by buying new real estate, the increase of those whose plans were unaffected, was from 49% to 62%,
• For those who only want to sell a house, an increase for those whose plans are as they were before is recorded from 59% to 68%. (Source Consumer research at Funda results up to and including 3 May 2020)
At the time of writing, the number of properties put up for sale is 3% higher than last year. The actual sales for the Amsterdam region have decreased with about 10% when compared to before the outbreak of Covid-19 (Source www.nvm.nl 2020).
The Amsterdam housing industry features three distinct kinds of searchers:
• The group of prospective buyers that search for real estate valued up to the amount of about €550,000.- is still very active and these homes are still being sold very well. There is quite some competition in this price segment and currently no real price drop.
• Above this price level, we notice that the dynamics have changed. This group typically consists of people who usually first have to sell their current home before they can buy another, and a lot of entrepreneurs are active in this price segment. For these people, things have become a lot more uncertain since the outbreak of Covid19.
• The uncertainty amongst searchers becomes stronger when asking prices reach towards €1 million and higher.
By way of example: where a property amassed 25 viewing requests before this crisis, it now garners only 10. The quality of the prospective buyers in general, however, is still very good. When people actually do come to visit, they are often very serious about buying.
On average, we detect that the asking price for new listings has been adjusted downwards. We also see that for some properties, nowadays there are more opportunities for price negotiation. The shortages on the housing market in the Amsterdam region were so great, that the current situation allows other groups of housing searchers to now have more opportunities to buy.
This period actually offers more opportunities for people searching to purchase a property in the Amsterdam region who need to finance via a mortgage. The mortgage interest rate is very low. Additionally, you start paying back your mortgage loan from day 1 (usually over 30 years) providing a solid savings plan. History has shown that investing in real estate has proven to be a lucrative investment. Renting a home is still relatively expensive and you don't build up any assets.
Right now, the advice of a purchase broker is vital. It is important to know if the house or apartment you have in mind is a good investment and if you don't overpay for it. Some properties leave some room for negotiation, others do not at all. New tools have been developed for the buying process during Covid-19. For example, the online video viewing can replace the first viewing. People who are initially not in the position to view a house in person can yet view it remotely.
This could be the right moment to find a home in Amsterdam, due to the actual chance of fewer prospective buyers, the possibility of negotiations and the good mortgage conditions.
Article written by Tips4Expat in collaboration with their partner KNAP Makelaardij.
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Myriam Clouët des Pesruches (Managing Director)