Has the COVID-19 pandemic affected the Amsterdam housing market?

The housing market in Amsterdam was more overheated in the first quarter than we have rarely seen before. Prices within the ring road rose by 3% compared to the fourth quarter of 2019. The average bid premium also increased during the same period, from 5.7% to 6.4%! The coronavirus therefore had no impact on housing prices in Amsterdam in Q1.

The Future of the Housing Market in Amsterdam During the Coronavirus Pandemic

Many new listings

The coronavirus crisis has, however, led to a surge in new listings over the past three weeks. For many of our clients, we serve as a sounding boardas they consider the expected developments in Amsterdam’s housing market. Uncertainty about the timing of the next step in their housing journey has increased significantly. Many people have decided to move up the sale because the market is strong right now. The future is, by definition, uncertain, which is why many clients are choosing to put their apartment or house in Amsterdam on the market quickly.

Some job seekers drop out, but activity is on the rise

We are seeing a decline in the number of homebuyers looking to purchase in Amsterdam. Uncertainty about their own business or flexible contract is causing some people to put their search on hold for the time being. We are therefore seeing a certain degree of decline in demand. However, the number of prospective buyers per home was extremely high in the past quarter, so this correction is unlikely to immediately hurt the market in 2020.

The housing market in Amsterdam has a strong foundation based on three factors:

1/ Amsterdam is a magnet for national and international companies and for young, highly educated people. See the graph showing the influx of new residents, which indicates that the influx is accelerating

2/ There is a severe shortage of owner-occupied homes, and this shortage is only getting worse because new construction cannot keep up with the influx of new residents; furthermore, under the municipality’s new standards, only 20% of new construction is designated for sale. The remainder is allocated to social housing and mid-range rental units.

3/ Mortgage rates are very low, and although interest rates are expected to rise slightly in the coming period, they will still remain at historically low levels. As long as Southern Europe remains in difficulty and the budget deficit relative to GDP remains too high, the European Central Bank will have to keep interest rates low.

Overall, the outlook for the Amsterdam housing market in 2020 amid the coronavirus pandemic is that a better balance between supply and demand will emerge due to a decline in the number of homebuyers and an increase in supply. Economic uncertainty is playing a role, particularly in the higher-end segment. The price segment below €750,000 will remain quite robust in 2020. In the absolute top segment, we expect greater caution among buyers.

How are things going in the different neighborhoods of Amsterdam?

See price trends in the City Center, Oud Zuid, Oud West, De Pijp, and Rivierenbuurt.