The Netherlands’ housing market is increasingly pricing out average earners, with a gap of approximately €100,000 now separating typical household incomes from the cost of purchasing a home, according to a report released Tuesday by the Centraal Planbureau (CPB), the Netherlands Bureau for Economic Policy Analysis.
The CPB’s first Toegankelijkheidsmonitor Koopwoningmarkt (Accessibility Monitor for the Owner-Occupied Housing Market) found that in 2024, a household with a median income faced an average shortfall of €100,000 when attempting to finance a home. This represents a significant shift from a decade ago, when a median income was generally sufficient to secure a mortgage. Currently, nearly two times the median income is required to purchase an average house.
The findings coincide with a parallel assessment from De Nederlandsche Bank (DNB) and the Autoriteit Financiële Markten (AFM), the Dutch central bank and financial markets authority, respectively. Conducted at the request of the Minister of Finance, the Monitor leennormen en financiële stabiliteit (Loan Standards and Financial Stability Monitor) advises against easing lending criteria. DNB and AFM cautioned that more lenient rules could fuel higher bidding wars, increased household debt, and greater risks for both homeowners and financial institutions, further inflating prices.
Both agencies stopped short of advocating stricter lending norms, although, citing concerns that such measures would further exclude first-time buyers from the market. This delicate balance reflects the complex challenges facing Dutch housing policy.
Data presented by the CPB demonstrates a marked acceleration in house price growth relative to wage increases since mid-2023. House prices have risen by approximately 21% during this period, even as wages have increased by around 14%. The proportion of owner-occupied homes affordable for a typical household has plummeted from 61% in 2015 to 21% in 2024. In the four largest Dutch cities, this figure is even lower, at just 18%.
The total mortgage debt in the Netherlands currently stands at approximately 80% of the country’s gross domestic product (GDP) – a figure exceeding the Eurozone average. However, This represents partially offset by the high rate of homeownership and the strength of the Dutch pension system, which assists retirees in managing their housing costs.
Recent trends also indicate a shift in the rental market. According to reporting from De Telegraaf, the implementation of the Wet Betaalbare Huur (Affordable Rent Act) has prompted many landlords to sell their properties – a phenomenon known as the “uitpondgolf” (sell-off wave) – leading to a significant reduction in the availability of rental housing. This dynamic further exacerbates the pressure on the owner-occupied market.
DNB and AFM noted that homeowners have generally become less vulnerable since 2013, due to rising house values and improved loan-to-value ratios. However, the current trajectory of price increases raises concerns about the sustainability of this trend.
