The best way to visit the Dutch capital of Amsterdam is to view it from the water. A boat tour in a wooden river launch will take you on a gentle journey through the city’s tree-lined canals, past the stonefronted mansions and decorative brick facades that make up the heart of the 17th and 18th century Dutch capital – and its most desirable real estate.
The Dutch capital is known as the Venice of the North for a reason. Its gracious canal houses – now a Unesco World Heritage site – its museums and its easy way of life have made the city a magnet for both tourists and locals. Amsterdam is a constant factor in international rankings about world’s best places to live and do business. Last year, 143 foreign firms made the move to the Dutch capital and its surrounding areas, bringing 2,700 jobs with them. English is widely spoken in Amsterdam.
Like Dublin and Berlin, Amsterdam also enjoys the favours of the tech industry. Uber, Netflix and Amazon all have headquarters in the city. The Netherlands has also been the source of numerous engineering-based start ups, many focused on green business and sustainability. Amsterdam has also been at the forefront of smart city development – The Edge, widely regarded as the world’s smartest and most sustainable building, is in the city. Furthermore, the developer of The Edge has just spun off Edge Technologies, to develop a “new generation of buildings”.
Property prices in Amsterdam are catching up to the action, having soared in recent years and finally surpassing their height before the 2008 Global Financial Crisis. Figures from CBS, the national statistics office, show that the average asking price for a home in Amsterdam is now €506,000 (HK$ 4,878,500). Tiny flats in the 19th century areas west and east of the old city, districts once considered beyond the pale, are changing hands for prices nearing €400,000.
TOO LITTLE SUPPLY
The Amsterdam market is extremely overheated and has been for the past couple of years, says Sven Heinen, chairman of the Amsterdam real estate agents’ association, MVA. “There is a lot of demand, but a real lack of supply, and we are now seeing a reduction in the number of transactions,” he says. “It is a very difficult market for buyers and agents but a great one for sellers of course.”
The price rise dates back to the end of 2013, when the Netherlands fully emerged from the economic crisis. House prices in Amsterdam have risen by up to 25 per cent since then, as people who had been trapped by negative equity and were unable to move, could suddenly do so. Record low interest rates have also had an impact.
What really typifies the Amsterdam real estate market is the dominant position given to social housing – some 60 per cent of the city’s housing stock is rentcontrolled, comprising homes with a rent of up to €710 a month.
This squeeze on what are known as “free sector” homes – flats outside the social sector – means that teachers, policemen and nurses are being forced out of the city. Some steps are being taken to remedy the situation, but affordable housing continues to be the hot topic these days. Developers have, for example, been given the green light to build large complexes of micro-homes or studio flats aimed at young professionals, complete with gyms, cafes and state-of-the-art Wi-fi – often in prime locations.
City development guidelines state that 40 per cent of new properties must fall into the social housing sector, a further 40 per cent must be what is known as middle income properties – up to around €1,200 to rent – and the rest, just 20 per cent – is for owner occupiers or private investors with more money to spend. These rigorous rules, implemented in 2017, have been made possible by
“IT IS A VERY DIFFICULT MARKET FOR BUYERS AND AGENTS BUT A GREAT ONE FOR SELLERS OF COURSE.” – Sven Heinen, MVA
the fact that the city itself owns most of the land – leasehold is extremely common.
“We want to create a mixed city, where poor and rich live side by side and that is a deliberate part of our policy,” said Lex Brans, the city’s director of real estate marketing. “We don’t want homes where rents are too high. Amsterdam must remain an inclusive city.”
MASTERING THE ART OF THE LITTLE HIGH RISE
The lack of land for new building does not mean that Amsterdam’s buildings are getting taller. The city skyline is typified by the lack of high-rise buildings that you might expect in a modern metropolis. This, again, is due
to strict zoning laws and rules banning buildings of over 60 metres in many areas. The few luxury high-rise properties to come on the books in Amsterdam are being snapped up as quickly as they are being built. Pontsteiger, overlooking the Amsterdam waterfront, is one example of an iconic new building – a huge square arch framing the waterway and providing terrific views over the city. There can be little wonder then that the two penthouses were quickly snapped up by an Amsterdam entrepreneur, who is converting them into one panoramic home.
Experts suggest the city needs to build far more than the 6,500 homes currently completed every year to catch up with demand – the city’s population is forecast to top one million by 2034 and
is currently growing by 10,000 a year. “Building is going on but it is too late and not enough,” says Mie-lan Kok, a city estate agent who specialises in helping expats buy a home. “People really like living in Amsterdam and when you compare it to other cities, it is still relatively cheap.”
The city is also grappling with its popularity as a tourist destination. In particular, the practice of buying up empty homes and renting them out to tourists via websites such as Airbnb has come under fire. Amsterdam was one of the first cities in the world to reach an agreement with Airbnb on how many days homeowners can rent out their properties, but the 60 day limit agreed in 2016 is to be cut back further to 30 days.
In January, the city joined forces with Barcelona, Vienna and Paris to urge the European Commission to better regulate the lucrative holiday market by forcing Airbnb and other platforms to share their data with the cities themselves. Campaigners say that the lucrative income from holiday rentals means houses are not being put back onto the market when people either move or set up home together.
As well as the overall shortage of housing in every price class, the simple lack of space is another major issue. “Some 80 per cent of homes within the Amsterdam ring road are smaller than 80 square metres, and there are very few family homes,” says Heinen. “If you are looking for three or four bedrooms you are looking
“WE DON’T WANT HOMES WHERE RENTS ARE TOO HIGH. AMSTERDAM MUST REMAIN AN INCLUSIVE CITY.”
– Lex Brans, City of Amsterdam
for at least 120 square metres and more… then you are looking at upwards of €1 million. If you are looking to buy a family home in the canal area itself, then buyers have to be prepared to pay much more than that.”
Not only are Amsterdam houses small, but they are also often lacking in bathrooms when seen through foreigners’ eyes. Showers are more common than baths, and the small toilet off the hall with its tiny sink with no hot water are the butt of many an expat joke. “If we are talking high end, then people want two or three bathrooms, they want more sanitary provisions than the Dutch,” says the MVA’S Heinen. The Dutch, by contrast, want outside space. “People from abroad who are looking at the upper end of the market are used to spending time in the park, so they are not that bothered about a roof terrace or a large balcony,” he says. “They also consider a parking place to be essential, as well as a lift.”
Security is another issue. Intercom systems are becoming more common, but a ground floor doorman is a rarity. “My Asian clients in particular are used to having good home security and are used to there being a concierge,” says Kok. “I have to explain to them that Amsterdam is a safe place to live and we just don’t have them (home security features).”
Of course, homes which include the requisite number of bathrooms, security and lifts can be found, but at a price. The real top end – the hidden gems – get sold in secret for sums of €6 million and higher. These are the houses that are bought by television celebrities or top-level executives, and they want to keep it quiet. Luckily, Amsterdammers are very defensive of their privacy.
“If you want something exclusive, you need to work with an estate agent because they know what is out there,” said Marianne Joanknecht, a broker with Sotheby’s International, which has a specialised office in Amsterdam. “People with homes in the most expensive segments don’t want it to be known that their property is up for sale.”
Joanknecht focuses on this upper end of the market and says even the Pontsteiger development can be considered too far out of town. “What people want is the Dutch heritage, the canals, and there are only a limited number of those properties,” says Joanknecht. The area around the Rijksmuseum, voted one of the best museums in the world, and the main city park, the Vondelpark, are also extremely sought after for larger family homes, she said.
“I would always ask potential buyers if they really want to be in the canal district,” Heinen said. “People have this idea about what living in Amsterdam should be. But they should look in other parts of the city too. In Zuid, the southern district developed around the end of the 19th century, you’ve got more choice and you are still within cycling distance of all the main attractions.”
Then again, if you want everything in walking distance, a picturesque canal house awaits you.
“WHAT PEOPLE WANT IS THE DUTCH HERITAGE, THE CANALS, AND THERE ARE ONLY A LIMITED NUMBER OF THOSE PROPERTIES." – Marianne Joanknecht, Sotheby's International