Why are homes so expensive in the Netherlands?

Homes in the Netherlands are more expensive than in Belgium, but why are homes so expensive in the Netherlands? Houses, apartments, buying or renting. Purchase and rental prices are climbing the highest heights. Here you can read all the reasons.

Reason 1: Population figures are rising

The Netherlands has a high population density. Municipalities such as Amsterdam, Rotterdam, The Hague and Utrecht are the most densely populated.

The rising population is creating a rising demand for housing.
The population is increasing due to good birth rates and immigration.
The number of international companies and expats is increasing in these major Dutch cities.
According to IndexMundi the Netherlands had 416 inhabitants per square kilometer and Belgium 384 in the year 2020.

Reason 2: Lifestyle is evolving

In the Netherlands, we see the phenomenon of household dilution occurring. This means that, on average, there are fewer people in one household.

Older people are living at home longer.
The number of people living alone is on the rise. According to the Central Bureau of Statistics (CBS), 19 percent of residents live alone in the year 2024.
According to CBS, the average living area per person was 53 square meters in the year 2017. In 1900, it was 10 square meters per person.

Reason 3: The Dutchman is investing more in real estate

Real estate investors buy up cheap housing, renovate it, and then sell or rent it again for a (much) higher selling price. Thus, fewer low-cost homes remain.
There are more and more (private) investors, because savings rates are very low. These investors sometimes do not know what they are doing and buy apartments and houses at too high prices. Private home seekers cannot box in these prices.
We do see lower mortgage rates, which means you can borrow more from the bank. On the other hand, of course, the investor can do the same and start overbidding. It remains difficult to “win” as a home seeker.

Why are homes so expensive in the Netherlands_ Real estate investors — Image: Real estate investors

Reason 4: People are not building enough houses

The Netherlands did not feel the 2008 economic crisis in America until the year 20211:

Because of the housing crash, houses were worth less. In addition, there were many floods that year, flooding and damaging homes. Thus, houses were worth less than the original mortgage they took on their home. If you sold or had to sell your house then, you had a residual debt. As a result, people sold their homes less (quickly).
As fewer houses were sold, people also built fewer houses. This meant that construction workers were retrained and construction companies often went out of business.
Back then, fewer building materials were available, so it took longer to build a house and consequently made housing construction more expensive.
From 2013 through 2023, if you owned more than 50 rental units, a landlord levy applied on top of the corporate income tax. Housing associations with social housing also had to pay this and passed it on to their tenants. As a result, “cheap” social housing was no longer so cheap.

Reason 5: Regulations are tightening

Dutch (local) regulations are getting stricter, forcing construction companies to make investments and driving up home prices:

Construction produces nitrogen emissions. Nitrogen gets into the water and soil and is harmful to nature and humans. The government aims to Emission-free Construction.
There is PFAS in a lot of soils in the Netherlands. You can’t just dump PFAS-containing soil anywhere. You have to put it in a State Dredging Depot dumping.
You must pay attention to the noise you make while building. You must not cause noise pollution.
In addition, you have to comply with a lot of rules and laws:
- The Environment Act (2012 Building Code and 2012 Building Code Regulations).
- The Environmental Regulation.
- The Built Environment Decree (incl. Durability Requirements).
- Your municipality’s local rules.

Reason 6: Available building lots are scarce

In the Netherlands, government policy is strongly focused on preserving natural areas and limiting urbanization.

Thus, the amount of available building land is limited, creating scarcity.
With scarcity, housing prices are rising.

Why are homes so expensive in the Netherlands_ Row houses Amsterdam — Image: Row houses in Amsterdam

Sources: Central Bureau of Statistics., IndexMundi, NOS (Youtube), Central Government

Would you like to cite this article as a source? Then use:

Stiasteny, L (2024, Sept. 10). Why are homes so expensive in the Netherlands? Apartment.be. Consulted on (date XX/XX/202X), from https://www.appartement.be/waarom-zijn-woningen-zo-duur-in-nederland

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