Dutch homes more affordable for first-time buyers

Dutch homes more affordable for first-time buyers

The Dutch housing market is receiving plenty of publicity. The number of properties on sale increases, on-market periods become longer and house prices fall. While lower prices are a setback for home sellers and banks, they offer opportunities for first-time buyers to buy a home at friendlier financing costs.

The housing market has received a great deal of publicity in recent years, and much of it has been bad news. Since the outbreak of the credit crisis, the number of home sales has dropped sharply, as has the number of newly built properties. Average house prices have come down by about 10% since August 2008. This is an unfavourable development for homeowners who see their wealth decrease, for banks because the mortgage collateral has depreciated, and for the financial system because initially, its vulnerabilities have grown.

On the positive side, lower house prices mean that households looking for a home are enabled to buy better value for their money.

Opportunities for first-time buyers
First-time buyers have relatively low incomes and low savings. Thus many first-time buyers of a home have to borrow all they can afford. Falling prices have improved the affordability of home properties and have offered first-time buyers an opportunity to buy a home at lower financing costs. However, the housing market is no ordinary product market, where lower consumer prices lead automatically to increasing demand.

Source: dnb

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