By Karola Grünenbaum
Serious about purchasing a home in the Netherlands? You should begin watching the housing market carefully in the weeks or months before buying your first home in order to get a feel for whether it is in your favor. For the past year, the housing market has been favoring sellers. According to the statistics of the ground book records this is the most homes that have ever been sold in The Netherlands. Almost 165.000 homes were sold in 2016 with an average of 78 days being on the market. That is 23 days less than in 2015! And the average selling price in the last quarter of 2016 was € 248.000. This is also a price category that is selling very fast, and well over asking price in certain areas at the moment. It is an excellent time to purchase a home. Let me explain to you why!
Depending on where you want to live, you may end up having to pay a small fortune for the home of your dreams. This is why watching the market, surveying neighborhoods, and finding a good and savvy agent will help you in your search. After all this is the most expensive purchase you will ever do in your life. Make sure your agent is an expert!
While you should not become a slave to the housing market, you should keep the following four in mind before buying your first home here:
- The past market value of the home you are interested in buying
- How much house your budget can get you in different neighborhoods and towns
- Neighborhood value, and
- How much the home should increase over time
Just because you buy a home for a great deal does not mean you will make a huge profit when it is time to sell it. The housing market will continue to change and since this is your first home, you may want to choose something you can pay off quickly and make a larger profit on in the future.
Also, remember that any improvements you make on the home will increase its’ overall value. Just don’t spend too much money on improvements. Creating a home improvement budget and sticking with it will help you make those monthly mortgage payments and other payments that will be due.
One of the biggest mistakes that first time homeowners can make is buying a home for a lot less than they budgeted and then making improvements that will end up costing more money in the end. If you can find a great deal on a home, use that extra money as a cushion in case you lose your job or are too ill to work.
Owning a home is a big responsibility. Knowing how the market is moving and spending your money wisely will help when you are creating a budget, applying for a mortgage, and deciding how much to put down on a home.
Making The Most Of The Housing Market
While you should be watching the housing market, there are other two areas of interest you should be watching also, such as:
- National interest rates for mortgages, and
- Building rates in your area
Housing prices will keep on increasing
There is good news for home sellers as well, not only for buyers, housing prices will increase this year and also in 2018 with an average of 5% depending on the neighborhood, says DNB (De Nederlandsche Bank). Sales and consumer trust are back on the level before the crisis hit our country in 2008, which is a very good sentiment for future homeowners, like you. Make sure that you don’t miss out.
In The End
Buy a home when you are ready! Many times, people will buy a home because it is cheaper in the long run than paying rent each month. If you can afford to make the move into your new home now, your agent should not wait too long before making an offer for you. The housing market can change quickly and with competition out there, you may end up losing more money, if you don’t make an offer after seeing a home that you like.
Using The Housing Market To Your Advantage
By paying attention to current housing trends and keeping a watchful eye on the homes in your area, you will be able to make an offer on a home that will be accepted.
While the market is continually changing, it is a useful tool for those who are on a budget, who want to find a home that is large enough to suit their needs, and will be worth more when it is time to sell it.
7 tips when watching the housing market:
- The number of homes that are in your area
- The number of days the homes have been on the market
- The price of renting vs. buying
- The number of homes that are in your price range
- The highest price you can pay when buying a home
- Interest rates in comparison to housing prices, and
- The time of year
Springtime (and early summer) is a good time to buy a home for several reasons:
- More people want to sell
- It is easier to make appointments to view homes
- Prices are usually lower
- People are more willing to reduce their asking price
There will be plenty of people who could not sell their homes in the fall or winter months and who are trying to sell well before mid-summertime. Homeowners that need to sell their homes before a certain time are more willing to reduce the price of their homes.
While you should consider looking at a home during any time of the year, you will find that many homes will be lower in springtime to attract buyers. This is also the time when interest rates are re-evaluated and many lenders are willing to give loans easier.
While the housing market can change, the idea of selling one’s home will not. Homeowners may choose to wait out the current housing market, but if they are eager to buy another home or move to a new place, their wait will be short-lived.
Negotiate with homeowners until a fair price can be reached. This is the same practice during a sellers’ market as in a buyers’ market. You may have to play the bidding game for a week or two, but in the end, it is the person who needs to make the transaction happen the most that will end up compromising the most.
Karola Grünenbaum is the founder of STARK Real Estate & Relocation Services, a company that is helping individuals and investors to sell, purchase and rent residential homes in The Hague and surrounding areas since more than 20 years.
For further advice about the Dutch Housing Market, take a look at Karola’s other excellent article on: Critical Tips for Buyers in a Seller’s Market.