Q3 2021 Amsterdam: Are prices heading toward €10,000 per square meter?

Prices in Amsterdam (just like in the rest of the Netherlands) continue to rise, increasing by an average of 17% from €6,140 to nearly €7,200 per square meter. Within the Ring, the average price per square meter is €8,000. If prices continue to rise at this pace, we, as real estate agents in Amsterdam, expect the €10,000 per square meter threshold within the Ring to be exceeded sometime in the spring of 2022. All in all, this is a concerning development.

A Troubled Housing Market

For more and more people, the housing market is becoming a challenge when it comes to moving up the property ladder—but certainly also when it comes to buying their first home!

Lower supply

As of now (late October 2021), there are 1,400 homes listed on Funda. The number of transactions has decreased by 20% compared to Q3 2020. Many people want to move but are having trouble finding their next home. This group of people is therefore waiting to list their home for sale until they have purchased a new one.

Buying a home is difficult and time-consuming. As a result, the number of homes on the market is declining. With fewer homes for sale while demand remains high, this naturally puts additional upward pressure on prices. New construction could provide some relief, but the number of homes in the pipeline is too small to make a real difference.

So maybe we should just live outside Amsterdam’s ring road?

Most people would like to live within the Ring Road, which is, of course, understandable. However, this is becoming an option for fewer and fewer people. Living within the Ring Road is becoming increasingly out of reach for people with an average income. There are still relatively affordable neighborhoods in Amsterdam. In Amsterdam Southeast, the average price per square meter is €4,400, a difference of €3,600 per square meter compared to prices within the Ring. Nieuw West (€5,500 per square meter) and Amsterdam North (€5,550 per square meter) are also still somewhat affordable. 

Mortgage rates rise slightly

Financial experts expect a very slight increase in mortgage rates. The ECB is very reluctant to raise interest rates due to the weakness of the economies in Southern Europe. On balance, we therefore do not expect a slight rise in interest rates to have a dampening effect on home prices.

Is a housing market correction on the horizon?

We’re afraid not. In our view, the underlying factors will not change. The most important factors are: 

• Shortage of supply
• Influx of new residents—both domestic and international. Amsterdam is an economic and cultural magnet that attracts many people
• Low mortgage rates

Wouter Thöne

EOwner and Director of Amsterdam at Home Real Estate