The average wage in the Netherlands is 36,500 Euros per year
Translated by Thomas Ansell
Dutch house prices have become so ridiculous that the so-called ‘Jan Modaal’ (someone that earns the average wage in the Netherlands, or 36,500 euros) can no-longer purchase a house by themselves. Indeed, two average salaries are required to purchase, says a mortgage advice firm. As reported by the Dagblad van het Noorden.
Between 2011 and 2016, house prices generally kept at a level that people could get mortgages to pay for them under the so-called ‘one and a half’ principle. The principle goes that the maximum mortgage value people could receive was 1.5 times their income- and this was enough to buy a house. Now, though, people have to combine their incomes to get the same mortgage value and property.
Since the average property price in the Netherlands is 361,000 euros, and the maximum mortgage value you can get with two average incomes is only around 375,000 euros, there’s a growing gap between what people on average incomes can afford and the price of housing.
The national association of estate agents, surely the most hair-gel heavy of all associations, says that house prices are up by about 20 percent on this time last year- and they expect prices to keep rising.
Credit is cheap, due to there being a very low base rate of interest in the Netherlands, but as the US saw in 2008, buying houses on cheap credit can go belly-up once that line of credit is cut.
Photo by Maria Ziegler on Unsplash
