Home prices in Groningen and Drenthe have risen by 4.3 and 5 percent respectively in the past year, but new home prices have also risen dramatically.
Translation by Traci White
Prices have also risen in Friesland, but slightly less dramatically: the Leeuwarder Courant writes that the average price of real estate properties was up by 2 percent in the first quarter of 2018 compared to 2017. Overall, the average sales price of existing homes is around 8,000 euros more expensive than a decade ago. Numbers are not currently available for any pricing changes for newly built homes in Friesland.
Dagblad van het Noorden reports that the housing market in the city of Groningen takes the cake when it comes to real estate competition: prices in the second quarter of 2018 were 14.8 percent higher than the same period in 2017. That is far above the national average of 10.4 percent. In the northern and southwestern sections of Drenthe, prices rose by 8.4 and 6.7 percent, respectively.
New build homes
One of the most striking findings from the latest housing market numbers, provided by NVM (Nederlandse Vereniging van Makelaars, the Dutch Realtors Union), was the prices for newly built homes: they have also risen by 14 percent. Jan Palland, a realtor in the city of Groningen, told the Dagblad that subcontractors in particular are benefiting from the competitive market. Profit margins were extremely slim during the years of the financial crisis, but as demand has grown, so too have margins.
Palland went on to say that a shortage of craftspeople, from carpenters to plumbers, is also impacting pricing for new homes. “A lot of companies laid off employees during the financial crisis, and those craftspeople became self-employed and are not returning to their former employers. They can earn a lot more by working for themselves.”
That means that construction companies have to dig deeper to pay attractive wages to qualified staff, which reportedly in turn translates into higher project expenses. Construction material costs are also on the rise due to high demand, and the majority of new homes being built are generally higher quality and therefore more expensive to build. Many of the gas-free homes rely on solar panels, and NVM member Tebbens Torringa says that loans for up to 25,000 should be made available to make these new homes more financially attractive.
Another contributing factor is that new homes are largely built without connections to the natural gas network, which reportedly costs an additional 10 percent. The unchecked growth is symptomatic of a looming housing bubble that will inevitably burst. The actual number of homes available on the market is declining: there were 5.8 percent fewer homes available in Groningen and 5.3 percent in Drenthe in comparison to last year.
Photo source: Jeroen Stoop / Wikipedia