Family van Pelt at their home in Purmerend.Statue Freek van den Bergh

    In Uithoorn and Amstelveen, real estate agent Chris van Zantwijk sees the atmosphere on the housing market changing rapidly. ‘A year ago, eighty people applied for a home, now about twenty to thirty,’ he says. ‘People are still outbid, but you can see that the buyers have a shorter pole because of the interest rate developments.’

    After years of super low rates, borrowing to buy a house has quickly become more expensive in recent months. This year, the average interest rate has already more than doubled from below 2 percent to 4 percent this week. For a loan with a term of twenty to thirty years, the interest rate is even approaching 5 percent.

    More and more experts are taking into account that this will halt the sharp rise in house prices. After all, low interest rates, which reached a low of about 1.4 percent last year, were one of the drivers of the bonanza on the housing market for many years.

    Now the interest account is rising again. A rough calculation by ABN Amro shows that a couple who together earn about 100 thousand euros, could borrow around 550 thousand euros at an interest rate of 1.9 percent. At an interest rate of 4 percent, that amount is tens of thousands of euros lower. From the turn of the year, that amount is likely to fall even lower as high inflation leads to a further tightening of mortgage standards. The higher the cost of normal living, the less people are allowed to borrow.

    So many home buyers are left with the question: is it wise to strike ‘at the top of the market’? Especially people who have to borrow their entire purchase amount run the risk of ending up with a residual debt in the event of a forced sale.

    Less demand, more supply

    At the housing site Funda they can see how sentiment has turned. Selling brokers received 32 percent fewer responses to homes than a year ago. And sellers seem to be hurrying: in May 40 percent more homes were put up for sale than in the same month of last year. The Eindhoven real estate agent Pieter van Santvoort attributes this, among other things, to the people who are waiting for the delivery of their next home. ‘They do not want to run the risk of having double housing costs and are looking for the security of the current market.’ His Purmerend colleague Marc Jonk also sees this. ‘A number of sellers are on the safe side.’

    Less demand and more supply. But that does not mean that prices are going down, according to the brokers. In the popular Eindhoven area, the number of interested parties per home has halved to thirty to forty, says Van Santvoort, a large real estate agent in the region. “That’s still way too much, so there’s still a lot of outbid.”

    ABN Amro economists wrote at the beginning of this month that a price correction would be ‘normal and healthy’, after a long period in which houses often became 20 percent more expensive per year. Still, the bank expects a ‘moderate increase’ for the time being. The Dutch Central Bank (DNB) also recently expressed the expectation that house prices will continue to rise slightly, by about 3 percent per year over the next two calendar years, roughly equal to the estimated inflation.

    This inflation can also be a reason for home buyers to strike, especially for workers, despite all the uncertainty. The salary can increase, but the loan amount remains the same, and so does the monthly payment. A significant advantage over renting, where the annual rent increase is usually linked to inflation.

    The playing field also becomes more favorable for the ordinary buyer. Not only will the jubelton (the tax-free donation for the purchase of a home) soon disappear from the scene, but policymakers are also creating more and more barriers for home investors. They have to deal with increased transfer tax, purchase protection in many cities and probably also new rules to regulate the level of rents. In addition, the interest on rental mortgages has risen even faster than that for mortgages. Many private investors have now dropped out.

    A weird interwar period

    ‘The housing market is in a strange interwar period’, sums up the Tilburg housing market professor Dirk Brounen. ‘Investors are silent for a moment, people who already have a house themselves now want to sell first before they buy themselves, and starters will take more time with their decision.’ Brounen expects that exactly how this will work out will differ per region and type of home. ‘For example, you are not just going to buy a house with an E or F energy label, then the energy costs can now rise to hundreds of euros per month.’

    A statement by the Mortgage Data Network (HDN) already provides an insight into how this interplay of forces is working out. Starters also hold up somewhat with rising interest rates. This month, this group already applied for almost ten thousand mortgages, for an average of 342 thousand euros. That number is comparable to the monthly figures from last autumn, the amount is even slightly higher. ‘Their market share has been declining for some time,’ says an HDN employee, ‘but in absolute numbers they have been the most stable buyer group for years. And that hasn’t changed in the last few months.’

    In a week and a half, the NVM estate agency will present its sales figures for the second quarter, including data on overbidding and sales times. That will be the most exciting presentation in years.

    Winni Notenboom and her sister Sakia (l) have renovated a house together in Apeldoorn.  Statue Freek van den Bergh

    Winni Notenboom and her sister Sakia (l) have renovated a house together in Apeldoorn.Statue Freek van den Bergh

    Winnie Notenboom (51, e-commerce manager) and sister Saskia Notenboom (54, HR manager KLM):

    ‘A year ago we bought a house together on the Govert Flinckstraat in Apeldoorn, with the intention of refurbishing it and selling it again at a profit, especially because we enjoyed tackling such a project together. And maybe we’ll have some left too. It was a very dated house, so that was a huge job. We are followed by a camera crew from RTL4, for the program Worth the effort, which will air later this year. Construction specialist Bob Sikkes van Watch without buying gave us advice.

    ‘When we bought it, it was the time of outbidding, preferably without reservation of financing or building inspection. That madness is over now, we notice. We bought the house for 325 thousand euros and put a ton and a lot of time and effort into it. On the advice of two brokers, we put the house on the market a week ago with an asking price of 435 thousand euros. In this way we could attract many interested parties and persuade people to outbid, is the idea. Our house has been on Funda for a week now, but it is not yet a storm. In this first week, only one request for viewing has been received. To be honest, that does give you a bit of a tickle in your stomach. But it will be okay. The house has turned out beautiful. You can get in in no time.’

    Danielle van Pelt, Jan Willem Brandwacht and Stijn Kogenhop at their home in Purmerend.  Statue Freek van den Bergh

    Danielle van Pelt, Jan Willem Brandwacht and Stijn Kogenhop at their home in Purmerend.Statue Freek van den Bergh

    Stijn Kogenhop (22, marketing employee security company, completes his HBO graduation thesis in the evenings), Danielle van Pelt (50, training manager) and Jan Willem Brandwacht (52, safety specialist KLM Cargo):

    Van Pelt: ‘Together we did ten or twenty viewings for Stijn’s own house. Small homes in Purmerend, for which you now have to pay a minimum of 250-275 thousand euros. You have to be quick. And then the bidding begins. We have seen houses of which we thought: how? For this price? Then there was still so much to do.’

    Kogenhop: ‘The search has yielded nothing yet. First we looked at characteristic houses, older houses that still needed some work. But the uncertainty of such houses has become so great. Refurbishment or renovation has become too expensive due to the increase in the cost of building materials. This also applies to sustainability, while increasing energy costs would make you want to do this in older houses. It has become almost impossible for a starter to buy anything. I can only do that with a loan from my parents. I am the lucky exception. I don’t think the situation will be better in a year. The new construction is going so slowly. My generation no longer has any prospects in that regard.’

    Van Pelt: ‘I hope that the interest rate rise will stabilize the market, that the constant price rise will come to an end. Maybe the new build will help too. Collapsing, like after 2008, will not happen. But please get things moving again.’

    Vera Selhorst and Remy Klerx at their recently sold house in Utrecht.  Image

    Vera Selhorst and Remy Klerx at their recently sold house in Utrecht.

    Vera Selhorst (30, scenographer) and Remy Klerx (32, assistant business leader within the cultural sector):

    ‘Six years ago we bought a DIY house in Utrecht, which we renovated with a lot of love. Then it was finished and we were ready for a future-proof house, with more than one bedroom. We searched for three quarters of a year and were outbid seven times. Our offer on a house in Zeist – below the asking price – was accepted. Three sizes larger than our current home and with a real garden.

    ‘Selling our old house was a lot more exciting after that. We are really noticing that the market is cooling down. For the past two months, refurbished houses that seemed to have been sold have reappeared on Funda, sometimes for a ton less than before. Buyers are shocked by the rising costs of energy and building materials. That’s why they’re backtracking, we think. With the rising mortgage interest rate, it remains to be seen whether the sale price you hope to achieve will actually become a reality. Just four months ago, buyers had to call the real estate agent at 9 a.m. if they wanted to view a house and overbidding was standard.

    ‘Twelve people registered for a viewing of our house in Utrecht. As the viewing days approached, more and more names disappeared from the agenda. In the end there were eight viewers. That turned out to be fortunate enough. We were able to sell the house above the asking price, but for a realistic amount, to a nice couple from the neighborhood.’