No one has missed the current housing crisis. The interest rate is slowly starting to rise. House prices keep going through the roof. We have too few new-build homes, and contractors are expensive. You can feel the despair in lots of people, and first-time buyers have no idea how they'll ever get a home.
Contents
- Government interference
- We have too many square metres per person
- Even fewer people per home
- The number of households compared with the housing stock
- Has living become more expensive?
- Should we even be looking at the number of homes?
- Conclusion
Government interference
We wrote a blog earlier about solutions for the housing market. We explained how the government tries to interfere in the housing market. Opkoopbescherming (rules that stop investors buying up cheaper homes to let them out), changes to the letting rules and restrictions around nitrogen. But does this interference work? Or does it actually make the problem even bigger?
We have too many square metres per person
In the Netherlands we have an average of 65 m2 per person. That means we live much bigger than, for example, the Germans. They have an average of around 46 m2 per person at their disposal. The British have just slightly fewer square metres. They have to make do with an average of 44 m2 per person.
You see that single people, on average, live the biggest. On average, single people in our country live on 88 m2 per person. But in cities such as Amsterdam, Utrecht, Wageningen, Delft and Groningen, single people live on less than 70 m2 per person. Everyone thinks we live smallest in Amsterdam. There, Dutch people have to make do with 49 m2 per person. But in reality, people in Scherpenzeel live on the fewest square metres per person, namely 44 m2 per person. Funnily enough, then, Amsterdam isn't the city where people, on average, live the smallest.
Even fewer people per home
For clients, we're helping with buying a home for their student children in Rotterdam. You can think what you like about parents helping their children buy a home. Sander en de kloof (a Dutch TV series about the wealth gap) isn't a hit for nothing. But this father does want to create extra living space for his children and their fellow students. In fact, he doesn't want to make money from it; above all, he wants to create a really nice place for his child and fellow students. Now, Rotterdam has introduced opkoopbescherming, but also new rules on house sharing. This is supposed to result in more homes for first-time buyers and fewer homes for investors. Investors are the devil and the great evil in the housing crisis. But is that really so? As mentioned before, in the Netherlands we have a lot of square metres per person. On average we have no less than 65 m2 per person available. Relatively speaking, we have more than enough living space for the number of inhabitants. But on average we live too luxuriously and too big. With the rules that no longer allow homes to be shared, we'll get even more square metres per person on average. But that won't get us more homes. So really we're only making the problem bigger. I know lots of people will get angry now and post nasty comments under this blog. Out of frustration, and I understand that. But we all want a big and affordable single-family home. However, affordable, big and keeping enough green space isn't possible.
Older people in particular live big. They're ‘stuck’ in their homes. Often their big single-family home is mortgage-free, or they've been renting it for a very long time. So their monthly costs are low. Moving to a smaller and more comfortable house makes the monthly costs much higher. As a result, lots of older people stay in their big single-family home. With the rules as they now are in Rotterdam, these seniors can no longer take students into their home. Unless there are still two of them living there. Then, under the lodger scheme (hospitaregeling), they can still have two students live with them.
The number of households compared with the housing stock
According to the Centraal Bureau voor de Statistiek (CBS, Statistics Netherlands), there is no question of a big housing shortage. There are supposedly more homes per household now than twenty years ago. According to the CBS, since 2012 the number of homes has increased administratively by 52,000, and the number of households has fallen by 35,000. That sounds great, but it's actually a correction. On 1 January 2012 a change was made to the BAG (the national register of addresses and buildings). So before that, 52,000 too few homes had actually been registered. For years, the number of households was overestimated based on the data. This has been corrected. So unfortunately it's not the case that more homes were added and the housing shortage actually decreased.
According to the CBS, in the period between 2008 and 2018, 12,000 more households were added than the expansion of the housing stock. The crisis, when home prices fell sharply and you couldn't get rid of a home for love nor money, was in fact a period in which tightness in the market increased.
In actual fact, there's an even larger number of households. House sharers and young people who are forced to live at home aren't included in these figures. Limiting the number of house sharers will push demand for homes up even further.
Has living become more expensive?
In our blog about affordability, we already wrote that house prices rose because affordability increased. During the Covid period, demand for homes changed. We were looking for bigger homes, more outdoor space and extra rooms. This also puts extra pressure on the market. In Utrecht, around 27,000 people are looking for a home to buy. There are only 251 homes available. There are around 1.1 homes that meet a searcher's requirements. You can see this creates enormous tightness. Of these 27,000 searchers, around 18,000 people are looking for a single-family home. To give you an idea, we only have around 67,370 single-family homes in Utrecht. That includes the rented stock. So there are only 30,317 owner-occupied single-family homes. The largest group is looking for a home with more than 5 bedrooms and larger than 100 m2. House prices rose sharply, and with them the prices per square metre. On the other hand, interest rates fell sharply in recent years. By taking out a partly interest-only mortgage, buyers made sure their monthly costs often didn't rise too much. So people could afford to buy a more expensive house. This allowed prices to keep rising. Only recently have interest rates been rising.
I still think our own moving plans are a good example. Because of falling interest rates and rising prices, it's attractive for us to move. We wanted to buy the property next door. In the past two years our home has become worth more because of our renovation and the price rises in the housing market. Interest rates have fallen in the past two years. If we bought the property next to us, in absolute numbers we'd pay €150,000 more. But our monthly costs would fall by €300. On top of that, the two of us would gain around 50 m2. Living bigger for less money. That's really very attractive. And more people think like that. As a result, homes have become more expensive in absolute numbers, but for people moving up the ladder, homes have become cheaper per month.
Should we even be looking at the number of homes?
You hear everyone shouting: build, build, build. But does that actually make sense? The Netherlands is getting pretty full. On 12 April 2022 we already reach Earth Overshoot Day. We need space for homes, solar panels, wind turbines, ports and industry, but also for our nature. We simply can't build over our entire country.
Conclusion
I think we need to look at a better distribution of our square metres. So the solution isn't to discourage house sharing in order to create more opportunities for first-time buyers. In fact, that only makes the housing shortage bigger. The solution could be:
- Subsidies for seniors to move to a suitable home
- Rising interest rates, which make it less attractive for people moving up the ladder to move to a bigger home
- Encouraging house sharing instead of discouraging it
Only by distributing our square metres better can we solve our housing problem. Most people won't like that very much. After all, we're used to our space. But our population is growing and, unfortunately, our land area isn't. We simply can't keep living bigger and bigger with more and more people. We don't have the space for that. Then we'd have to build seriously upwards. But that doesn't match our housing wishes either. We want single-family homes with a front and back garden, 5 bedrooms and larger than 100 m2. The ideal world.
