This month is all about the elections. A total of 26 parties are participating in this Lower House election. The candidate lists were determined on Friday, Oct. 13, and the new House of Representatives will be elected on Nov. 22. Until then, the political parties go wild with campaigns, television appearances, participation in radio programs and many promises are made by the participating parties!
The elections are mainly dominated by the following topics, the top 5 look as follows;
1. Immigration and Asylum
2. Cost of living/inflation
3. Housing Market
4. Health care
5. Climate and sustainability
Unsurprisingly, in this post we are addressing the topic of the housing market, which for us is the most important part of the upcoming elections.
If you ask the average Dutchman what the elections should be about, the topic of the housing market is often mentioned. Among neutral voters, this topic even comes in 2nd place, after immigration and asylum. But also for left- and right-wing voters this topic is in the top 3!
Housing market crisis
That it is such an important issue is because 86% of voters believe there is a crisis in the housing market. In fact, the situation is so bad that 1 in 5 people in the Netherlands would like to move to another home. Only that move is not in the cards for many people.
Especially starters on the housing market experience problems finding a suitable home and therefore stay longer at home with their parents. In the Randstad a starter home easily costs € 350.000 to € 400.000 while a starter with a starting salary can get a mortgage of around € 190.000. As a result, we see that expats have free rein in buying starter homes.
Because of the intended regulations in the rental sector, we see rental supply drying up. Quite simply, less rental supply means higher rents. Where a few years ago you could still find a rental home in Amsterdam for € 1.500, it is now almost impossible.
Building is the solution
Every Dutch person can agree on this. The supply of rental and owner-occupied housing needs to be significantly increased. Municipalities should step in and make building land available at an affordable price and/or make subsidies available for converting existing office buildings. In addition, it should become easier for the government to designate building sites so that construction can be accelerated. Even though a large part of the voters (about 25%) believe that the Netherlands is too full to build, it is still important that space be made available for this without this being at the expense of Dutch nature reserves.
Vision parties on housing market
It seems that the following parties will become the largest parties: VVD, GroenLinks/ PvdA and NSC (Nieuw Sociaal Contract by Peter Omtzigt). These 3 parties agree that additional construction is needed but what is their vision for the Dutch rental sector?
Today the ban on temporary rental contracts won a majority in the Senate. With the ban on temporary leases, there should be more security for tenants. Despite opposition votes from the BBB, VVD, JA21 and FVD, there appears to be a majority supporting this plan.
However, exceptions are included. Homeowners are still allowed to offer temporary leases to family members, students and expats. You may also rent for a certain period of time if you are temporarily moving abroad. It is not yet clear when these new regulations will take effect and existing rental agreements do not have to be adjusted.
Free sector regulation
The regulatory plans of Hugo de Jonge, our Minister of Housing and Spatial Planning, have caused quite a stir among private landlords, corporations, institutional investors and brokers in the Netherlands this year.
Adjusting the housing rating system will lower rents, which would lower the rent of about 300.000 homes by an average of € 190,- to € 200,- a month.
The rent points limit is increased to 187 points which corresponds to a rent of approximately € 1000,- to € 1100,-. Currently, this limit is 136 points which corresponds to a rent of € 808,- In short, with the new housing valuation system, fewer homes fall into the free sector.
Also, the rent increase will be capped at the CAO wage development + 0.5%.
Finally, the wealth tax on rented houses will be increased. For box 3 taxation purposes, the vacant value ratio in 2021 was 67%, it will be adjusted to 95% in 2024. As a result, private investors will pay more tax on the rental property(s).
In a nutshell, these are some of the plans Hugo de Jonge has put in place to stimulate the rental market in the low and intermediate segments. But the plans had a negative effect on the rental market right away. Investors selling up and seeking fortune elsewhere has been a prime trigger for a massive contraction in the rental sector. Rents are skyrocketing and sitting tenants are thinking twice before leaving for their next rental or owner-occupied home.
Support plans Hugo de Jonge
On the proposition that rental prices should be further regulated we see that parties like PvdA/ GroenLinks, ChristenUnie, SP and Volt support de Jonge's proposition. The VVD and BBB parties disagree and want the rental market to remain attractive for people who want to continue investing in rental housing.
Caroline van der Plas (BBB) in particular makes her case when it comes to the Dutch housing market. She supports the VVD and indicates, among other things, that politicians should listen better to Dutch investors. She worries about de Jonge's plans and fears an unhealthy investment climate.
It is still difficult to estimate where NSC's support will lie, but Omtzigt does speak out clearly about the building opportunities in the Netherlands. For example, he sets the bar high and, according to him, at least 350,000 homes must be built in the coming years.
We have highlighted a number of parties in the following overview
