Renting and buying too expensive, where should you live as a starter? | Here are our top stories

Due to the doubling of the mortgage interest, the monthly costs for an owner-occupied home have also become twice as high in less than a year. And in the past quarter there was an average rent increase of 17.1 percent in the Netherlands. Rooms in particular became more expensive. But the rent of apartments also rose by more than 16 percent. The Hague takes the cake with a price increase of 20 percent.

Peter Boelhouwer, professor of the housing market at TU Delft, does not see any change in rising rents anytime soon. “Due to new legislation, rents are no longer directly linked to inflation, but to wage increases. But due to high inflation, wages will also rise for a while. Within the various collective labor agreements you see wage increases from 4 to well over 10 percent.”

“Thanks to the rising wages, the rising rents are of course easier to bear. But then you still have the sky-high energy costs and increased prices in the supermarket. So in most cases purchasing power does decline. The costs can be as high as 40 to 50 percent in some.”

Where you see help from the government in the energy market through an energy ceiling, this is also imminent in the rental market. Minister De Jonge is coming up with a ‘mid-rental plan’ that should reduce the price of more than 300,000 homes by an average of 190 euros. According to Boelhouwer, however, this does not mean that many affordable homes will immediately be added.

“Landlords can get creative with the so-called step-by-step plan where the price can be determined based on the facilities in an apartment. And even worse, investors may withdraw from these types of projects because too little return can be achieved. “On balance, less affordable rental homes may be added,” says Boelhouwer.

Despite these uncertain factors, according to Boelhouwer, the rental market is easier to predict than the owner-occupied market. “What the mortgage interest will do is just harder to say. We see increases and then decreases. Most economists expect that we have had most of the rate hikes, but that uncertainty remains high. But a fall back to 1.5 percent mortgage interest seems unlikely.”

With both rising mortgage interest rates and rental prices, it is more difficult than ever for first-time buyers (and other home seekers) to find a suitable home. One of the consequences of this is that young people continue to live at home for longer. According to Statistics Netherlands, in 2020 young people were on average 23.7 years old when they left home, in 2012 this was still 22.8 years. And on January 1, 2022, 89.2 percent of 18-year-olds still lived with one or both parents. At 25 this was 30.8 percent, and 11.1 percent of 29-year-olds were still living at home.

“In addition to living at home longer, you also see more and more other forms of living together,” says Boelhouwer. “There are many pleas to make that easier. For example, two single people in one house. Another trend is temporary housing such as container homes, tiny houses or other circular and modular solutions. If you start building now, you are just a few years further.”

Boelhouwer continues: ,,With this flexible layer you get results faster and you can switch more easily in the future. The government is also committed to transforming existing buildings. Now you see that Ukrainians, for example, are accommodated there, but in the long term it could also be a solution for the housing shortage in the Netherlands.”

According to Boelhouwer, these alternatives are desperately needed, as the construction of new homes could take some time. “How the government deals with the nitrogen law is very important. I still see a lot of problems there. It is all getting more and more complicated, which means that you will get a lot of delays in the medium term. And then there is also the Environmental Act. That will also cause a lot of delay. There are simply too few officials to implement it all smoothly.”

“These problems are really recognized and are being worked on. But you also have to deal with economic headwinds. How you deal with this depends very much on the political choices that are made. Do you absolutely want to stick to inner-city construction, or do you still opt for expansion outside the city limits?”