The housing market in Amsterdam is booming. In fact, that might be an understatement. Homes are selling quickly, often well above the asking price.
What happens when supply goes down and demand goes up? Prices rise. And this is especially true in Amsterdam. The city is gaining popularity both nationally and internationally. One of the driving forces behind this trend is Brexit, which has led many multinationals to choose Amsterdam as their new base instead of London. It is no surprise that investors are taking notice. Home prices have risen by an average of 21 percent in just one year. That kind of return is hard to achieve on the stock market.
Higher asking prices and bidding wars
New listings often do not reflect the actual market value. But with multiple interested buyers, sales above the asking price are common. This presents a risk. Many buyers are aware they need to bid above the asking price to stand a chance, but they often do not know the true market value of the property. As a result, buyers either overpay or have no real shot at securing the home. As a buying agent in Amsterdam, it is our role to protect our clients from this by first clearly mapping out the actual value of the property. This significantly increases your chances of success, especially in sealed-bid scenarios.
Money to be made in the Amsterdam housing market
Prices are also being driven up by private investors who are no longer satisfied with savings interest rates of just 0.15 percent. In the first quarter of 2017 alone, the return on Amsterdam real estate was 3.6 percent. In 2014, homes were on the market for an average of 100 days. Today, they sell within 25 days. Fewer homes are being sold, but that is not due to a lack of interest—it is simply a matter of too few listings. The supply is limited. Buying a home in Amsterdam can generate strong returns in both the short and long term, but choosing the right property is essential.
Until the Amsterdam market cools down
Of course, home prices cannot continue rising by 21 percent every year. But average home prices in Amsterdam still cannot be compared to those in other global cities. In London, the average home costs £636,777 (around €729,412). Prices there have recently started to dip, but the decline is just 1.5 percent. In Melbourne and Sydney, property prices have been rising for over twenty years. While no one can predict with certainty that prices in Amsterdam will keep climbing, a major drop seems unlikely, especially with the ongoing housing shortage. Amsterdam’s office space market is also performing strongly compared to other European cities.
Investors who want to enter the Amsterdam housing market should always seek expert advice before making a move. In-depth knowledge of the local market is essential when selecting the right investment property. Are you considering buying a property as an investment? We help you secure the best possible real estate opportunity.
