According to the Dutch Central Bureau of Statistics, as of the third quarter of 2019, housing prices in Amsterdam had peaked up to 507,475 Euros. This has led to buying a house in the city more and more unaffordable and unlikely for its residents.
When compared to the figures back in 2013, houses have become twice as expensive; with the average price rising by 35,000 Euros in the span of one quarter to the next.
Earlier, prices had been static for a period of time when houses had begun being sold away from the city center. However, it seems the situation may have flipped now.
The housing stock in Amsterdam is also widely used as social housing.
What is Social Housing?
Almost every one in three houses in the Netherlands is a social housing unit. Typically meant for those with lower incomes, housing that is not divided by rooms or self-contained is considered as being social housing.
With these units dominating the housing stock in Amsterdam, it provides reasons as to why the lack of housing stock has led to prices increasing to such high levels.
A major driving force for the rapid increase in housing prices could be the fact that the interest rates are low; so, seeing as rent is high in the city and the interest rates on taking out mortgages is low, those seeking residence in the city will jump at this opportunity. These factors also attract investors into the housing market as the prospects of getting higher returns from housing units rather than shares or bonds is very attractive to them.
While the city of Amsterdam has planned that, by 2024, they will have built approximately 52,000 more homes; dividing it up like 40% of them being allotted to social housing, another 40% is priced mid-range, and the remaining 20% being expensive or high-end sale or rental properties.