A turning point in the housing market? When I came back from Austria and couldn't work for a while, I really thought a crisis was coming. I was prepared for an empty diary and anxious people. But it got busier than ever. How crazy is that? How countercyclical? That was the slogan of De Rooij Makelaars, where I did my final internship.
Contents
- Busier than ever
- Gardens and greenery are more important than ever
- Extra space a luxury
- Into nature
- Rents falling, except in Utrecht
- Higher pressure on the market for homes for sale in Utrecht than in Amsterdam
- Utrecht's growth
- Turning point reached?
- Selling your house?
Busier than ever
It's certainly countercyclical. There's absolutely no turning point in the housing market. The number of people searching keeps growing. At the moment there are around 41,500 searchers on Funda. These are searchers who actually request brochures and viewings. So not just the people who have made a hobby of it. Including new-build supply and homes under offer, under option and sold subject to conditions, we have 1,661 homes for sale. About 200 of these are homes in the Merwedekanaalzone. Two weeks ago this figure was still around 1,440. The tightness indicator is now 1.6 for the whole of Utrecht. That means that as a home-seeker you can choose from 1.6 homes that meet your wishes. Around the Amsterdamsestraatweg the tightness indicator is even 0.9. In the crisis year of 2013 the tightness indicator was 24.7. At the peak in 2008 it was 4.2. Demand has actually increased instead of decreasing. Isn't that strange? This week I listed a home on the Flamingostraat. A super nice ground-floor flat with a garden. But something happened here that I hadn't foreseen. I scheduled 40 viewings and the last time I looked I had 40 people on the waiting list!
Gardens and greenery are more important than ever
The Flamingostraat is super nice! But what's behind this enormous growth? The lockdown has reset all of us for a while. If we can't all go to festivals, take city trips and hang out endlessly on terraces, we'll have to get more out of our own homes. Homes with the potential to extend and homes with a lovely garden are becoming more and more popular. We ourselves have just moved into a house with what, by Utrecht standards, is a big garden. Working in the sunshine, experimenting with the kamado, a quick break in the sun. Fresh strawberries and tomatoes from our own garden. Those really were the little moments of happiness in the day.
Extra space a luxury
It's not just gardens that are in demand. Homes with room to create an extra workspace are popular too. This week we're going to list a home with a really lovely workspace upstairs, next to a roof terrace with a view over all the gardens. Spots like this are becoming more and more popular in these coronavirus times. We'll all be working from home more, and suddenly the cosy corners, extra little rooms and sheds we can convert into storage space are all in demand.
Into nature
Last September we bought a small sloop. After a hard day's work, it's lovely to clear our heads and enjoy nature. It's not just the nut shops that are busier than ever. The bike shops don't know where to conjure up bikes from either. We have all increasingly gone looking for ways to enjoy the greenery and keep active. It's no coincidence that I suddenly have many more searchers looking for homes in green surroundings and with an open view. If we spend more time indoors, we may want just a bit more space and to be out in nature just a bit faster. Living along the Vecht, walking by the Krommerijn: these are all areas that are seeing more visitors.
Rents falling, except in Utrecht
In many cities where you'd normally find lots of expats, rents are falling. Amsterdam, The Hague and Eindhoven are cities where many expats live. In Amsterdam the average rent fell by 1.4%. In The Hague the fall was 0.5% and in Eindhoven prices fell by 1.9%. In Rotterdam there was a very slight rise of 0.2%. Utrecht was a considerable outlier. Here rents rose by 5.6%.
Many expats generally have a bit more to spend than the average Dutch person. In addition, they mainly rent in the higher segment. The tourists who rent homes via AirBnB are also staying away. Many homes that were normally let via AirBnB have come onto the market for longer periods. This is creating much more supply and falling demand.
However, the pressure on the Utrecht housing market is so high that the increasing supply is not leading to a fall. Demand is still greater than supply. So the turning point in the rental market has been reached in some cities. But will it last?
Higher pressure on the market for homes for sale in Utrecht than in Amsterdam
During the coronavirus period it was also striking to see how many people from Amsterdam went looking for a house in Utrecht. In Amsterdam there are about 90,000 serious searchers. There are about 4,500 homes available there, including new-build supply and homes under offer, under option and sold subject to conditions. The tightness indicator for Amsterdam is 2.1. In the crisis year of 2013 it was 17.4, and at the top of the market in 2008 it was 3.8. So at the top, the pressure in Amsterdam was higher. During the crisis, the pressure on the market was also higher. So what explains the difference now? I don't know; for me this is pure guesswork. But I have the feeling that it has become clear to many people in Amsterdam that they would like a bit more space after all. A bit more nature around them and a bit more freedom of movement whenever it's possible and allowed. In 2016, 5.6% of the people who came to live in Utrecht came from Amsterdam. At the moment this is 9.2%.
Price rise Amsterdam Source: Brainbay
Price rise Utrecht Source: Brainbay
In the first years, the price rise in Utrecht was bigger than in Amsterdam. At the beginning of last year, the price rise in Utrecht started to level off a little. At that time I wrote a blog about the tipping point in the housing market. There was a lot about it in the media and in Utrecht we really noticed it. However, when it turned out that the nitrogen crisis was bringing construction further to a standstill and demand was rising, prices suddenly rose enormously. In Amsterdam everything was a bit more moderate.
Utrecht's growth
On 1 January 2020 Utrecht had 357,719 inhabitants. Utrecht is a young city with many students and young people starting out. The share of young children in the city has been decreasing in recent years, while the share of older people is increasing. This trend is also taking place in the other G4 cities (the four largest Dutch cities). At national level these developments have been visible for much longer. Still, more babies are being born than people are dying. At the moment the 65+ group is the fastest-growing group.
If you look at the figures, you can see that an ever greater housing shortage will arise and that Utrecht will become ever more densely populated. Not enough permits have been issued to absorb the expected growth. Utrecht was also the city with the second-highest number of fast-growing companies. Of course, we don't know whether this will continue with COVID-19.
On top of that, there is an ever-growing group of single people. This makes the city keep on growing. At the moment, 52% of households are single-person households. We expect an increase of 20,000 households by 2030. So we need more and more homes. Even if our population stays the same. More and more people are single. So we'll get more and more house sharers, and an enormous amount of extra building will be needed to keep meeting demand.
Turning point reached?
I fear not. At the moment I even have the feeling that the people who were constantly waiting for a dip now fear it isn't coming, and are throwing themselves back into the housing market in full force. Rents keep rising, and for many people this makes buying ever more attractive. The market is so tight that we really need a long time to bring it back into balance. Unfortunately, the turning point in the housing market is not yet in sight.
Selling your house?
Want to sell your house extra well in these times? We'd be happy to come round.
