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Talking Point

04.02.22

Its cosmopolitan flair and historic charm make Amsterdam a European city without parallel. Tjerk van der Linden of Engel & Volkers offers some sage advice for would be buyers

Despite the coronavirus pandemic, the real estate market in the Dutch capital remains on a strong course of growth. In the third quarter of 2021, prices for residential properties increased by 8% over the same period last year. The reason for this positive development is the significant surge in demand from both domestic and international buyers, coupled with the limited availability of properties on the market. Brexit has given the Dutch capital a boost as a financial centre. The city’s appeal is set to increase even further as a result, especially among an affluent buyer group made up of the academic and financial elite relocating from abroad. At the same time, the city will remain in demand as a place of residence for domestic buyers too.

Thanks to the business-friendly environment in the Netherlands, many multinational companies and start-ups have relocated their headquarters to the Dutch capital. For many years now, talented young professionals and highly qualified white-collar workers have been settling here from all over the world. After renting homes initially, they go on to realise their long-term plans on the property ladder. While domestic clients account for around 60% of the real estate market, 40% of all property transactions in Amsterdam can now be attributed to international buyers – and this trend is only intensifying. Search clients come predominantly from the UK, Germany, France, the USA and Asia. This strong level of interest from foreign clients means that the availability of residential property in the lower and middle price segments is particularly limited. Compared to the market in the Netherlands as a whole, Amsterdam has a relatively high proportion of properties in the premium segment, valued upwards of €1 million. Supply is meeting demand in the luxury segment. Rising prices over recent years, demonstrate how stable the market is, offering investors and private buyers long-term security.

The Canal Belt (Grachtengordel) in the city centre, is one of the most expensive addresses in Amsterdam. It has been a UNESCO World Heritage Site since 2010. Apartments along the traditional canals such as Herengracht, Keizersgracht and Prinsengracht command top prices of up to €12,000 per square metre. The buildings in which merchants and political officials once resided, are now a part of the city’s historical heritage and highly desirable among wealthy couples and high-income individuals.

Just next to the city centre, is the Museum Quarter (Museumkwartier), which boasts a rich art scene and wealth of culture, as well as the green environs of Vondelpark. Affluent families look here for time-honoured mansions with large gardens, whereas international buyers tend to prefer turnkey apartments that are already furnished, either for rental or ownership. In Q1 2020, prices per square metre for such freehold apartments reached up to €15,000. Detached family properties sold for peak prices of up to €10 million.  The Amsterdam-Zuid district is known for its vibrant flair and culinary hotspots. Its proximity to the Zuidas business district and good connections to the airport and motorway, make this area especially interesting for expats and foreign clients. Top prices for modern apartments are €12,000 per square metre. Sales prices for houses in this neighbourhood, some of which were built in brick in the style of the “Amsterdam School”, are up to €8 million.

High prices in Amsterdam’s central locations have meant that buyers have increasingly turned their sights in recent years to the regions to the west and east of the city. The trend towards country living close to nature has been reinforced by the coronavirus crisis. Large estates with magnificent gardens or their own private boat moorings have become retreats from the pandemic for many families. Remote working and the flexibility that comes with choosing where one works, is set to make properties on the city outskirts and in coastal regions even more attractive to buyers in the future. Up-andcoming locations with a high potential for appreciation in property prices are Bloemendaal, Haarlem, Warmond, and various villages in “het Gooi”.

The pandemic has swelled the buying mood among international clients and investors. In addition to the stock market, or by way of an alternative, real estate in Amsterdam is one of the most profitable capital investments. The stability of the market makes it a sound and future-proof investment. In the middle of the first lockdown, Amsterdam announced an economic and ecological revolution. With the launch of the “City Doughnut” project, it wants to halve its consumption of raw materials by 2030 and convert the entire economy to a circular economy by 2050. Projects of this kind will play their role in the sustainable structural shift of the city and have a positive impact on the development of property prices. In the long term, Amsterdam and its surrounding regions will remain a magnet for domestic and international clients drawn by quality.

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