It’s not all klomps and tulips in Amsterdam. The small Dutch capital offers a high quality of life for its residents and one of the most unique property markets you’ll find anywhere.
Built on a latticework of 160 concentric canals and traversed by over 1,200 bridges, Amsterdam combines the beauty of the 17th-century Golden Age with contemporary dynamism in a remarkably laid-back atmosphere. The city is certainly a metropolis, home to more nationalities than any other city in the world, but it is also small and accessible, easily explored on foot or by bicycle.
Although the city is home to quality art and museums with over 7,000 registered monuments, most of which began as the residences and warehouses of humble merchants, it does not feel as Venice does, like the relic of some forgotten age. Amsterdam continues to change and evolve and repurposes old and abandoned buildings for new uses, from music venues and galleries to food halls. This vitality, plus an enviable work-life balance means one of Europe’s most popular cities to visit is becoming a highly coveted place to live.
Following a tough, six-year slump — property values fell by as much as 20% between 2008 and 2013 — prices in Amsterdam’s most affluent areas are on an upward trajectory, so much so that some analysts are concerned the market may be overheating.
Prices in the capital surged almost 21% in the first quarter of 2016. “We have some regions in the Netherlands, especially around Amsterdam, our capital, where housing prices are exploding”, says Paul de Vries, a senior housing market economist with Rabobank Nederland.
The surging prices are partly caused by a simple supply-and-demand imbalance. In Amsterdam, non-profit corporations, largely for social housing, own almost half of the properties and there is not enough coming onto the market to satisfy buyers. “The city is extremely popular among young adults, but at the same time there is a very limited supply of owner-occupied homes on the market”, de Vries says. “The fact that there are shortages in the market is nothing new, but lower house prices and low mortgage rates have given an extra boost to demand since 2013”.
The supply shortage is a hangover from the financial crisis, which restrained new building and led to more families choosing to remain in the city, as it was harder to sell properties at a profit.
Plus, de Vries says banks are conservative about lending to builders.
In the first quarter of 2016, all houses that came on the market were sold, nearly half for more than the asking price. The momentum has continued throughout the summer. According to figures released by the Dutch Land Registry Office, 19,723 houses were sold in July, bringing the total transactions during the first seven months of 2016 to 112,935, an increase of more than 20% compared to the same period in 2015.
One of the most coveted areas is along the canal belt, specifically alongside the three widest and most elegant canals of the Dutch Golden Age: The Keizersgracht, Herengracht and Prinsengracht. Most of the 17th century townhouses that line the canals were originally built for wealthy merchants. Today, the majority have been subdivided into apartments. “People love the historical atmosphere and the fact that you are near Amsterdam’s opera and museums”, says Kees Kemp, a partner at Broersma estate agents.
Owners of canal houses can apply for a license – at an approximate annual cost of USD 1,100 – to moor a small boat for leisurely cruises around the city.
Outside the canal belt, families looking for more space, as well as the city’s best primary schools, tend to cluster on the south side of the 120-acre Vondelpark. This is the most expensive real estate in town, with a typical 297 square metre terraced house priced at around USD 3.3 million. When it comes to luxury housing, however, Amsterdam’s supply is even more limited. “As only 20% of homes are larger than 100 square metres, the exclusive market is very small”, Kemp says. Only about 60 homes priced at USD 2.2 million or more are sold in the city each year, and primarily to the domestic market – around 75% of high-end buyers are Dutch.
Though Dutch buyers are the most active in the luxury segment, Mr. De Vries of Rabobank says Chinese and Russian investors are also buying houses along the canals and in affluent neighbourhoods outside of the city centre. Though they may live in the Netherlands only three or four weeks a year, they buy for investment, he says, and are creating “a risk for price explosion” similar to the market in London or Berlin.
Investors are drawn by the city’s safety and secure ownership says Kemp, and the international community is growing. The number of inhabitants is projected to rise by 10,000 per year. Housing supply, meanwhile, will remain tight. “We expect the pressure on the housing market in Amsterdam to persist”, says De Vries. “The city remains popular and the number of owner-occupied homes is only rising very slowly”.
On the market
Luxury Waterfront Villa
Exclusive canal-facing villa on Apollolaan St with landscaped garden, sunny patios, private mooring and 3 parking spaces. Comprises 332 square metres over 3 floors with five bedrooms, 2 bathrooms, a kitchen with appliances from Miele and Gaggenau, a basement with laundry and media room, and a loft. Includes built-in alarm system, AC, under floor heating.
Price: EUR 3,480,000 (approx. USD 3.9 million) more info on broersma.nl
Restored Apartment at Tesselschadestraat
Located in the upscale Oud-West area near Vondelpark and cultural attractions this newly appointed 166 square metres duplex apartment encompasses the two top floors of a restored house. Includes a west-facing terrace, Poggenpohl kitchen with appliances from Gaggenau and bathrooms with sanitary ware from Villeroy & Boch.
Price: EUR 1,725,000 (approx. USD 1.9 million) more info on broersma.nl
This story was first published in PALACE Magazine