Young Dutch house-buyers need to be earning 70k a year

Young Dutch house-buyers need to be earning 70k a year
Amsterdam, The Netherlands Photo: Militiadis Fragkidis - Unsplash

Should you only be able to buy a house if you earn 71,000 euros a year as a minimum? 

A study by the Dutch news site has shown that that is the reality facing young people in the Netherlands, as a combination of increased house prices, higher mortgage interest rates and strict borrowing standards has raised the threshold for first-time buyers. 

The report shows that between 2003 and 2015, first-time buyers needed a gross income of around 40,000 euros to be able to enter the housing market. However, in the last few years this figure has skyrocketed to 71,000. Although income did also rise in this period, it is nowhere near the rate of the house-buying threshold. 

One key factor behind this change has been the increase in house prices in the Netherlands, with the average home now costing 380,000 euros – a 90% increase on 2003. Added to this is the fact that young people are benefiting less and less from tax benefits such as the mortgage interest deduction, and the fact that borrowing standards have tightened since the 2008 financial crisis. 

Worsening these other issues has been the sluggish rate of new housing construction, with the number of new houses increasing less than the number of inhabitants since 2011. 

Rabobank economist Stefan Groot says that the only real solution to the issue will be to build more homes, which won’t serve to bring prices down but would at least help to reduce the pace of further increases.

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