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Broersma Brokerage - "Increasing scarcity leads to rising house prices"

Published on 11-02-2020
House prices in Amsterdam are going up even further. Kees Kemp, one of Broersma Makelaardij's partners, has no doubt about this. “A changing population composition, the growth in the number of inhabitants and a low interest rate result in high housing demand, but the supply is scarce. The scarcity will increase even more in the coming period. That translates into rising prices. "

Kees Kemp hears politicians in the capital talk about a "housing crisis." He will not use that word. Kemp has, however, observed structural, very essential changes within the capital-owned housing market for decades.
 
“Amsterdam is going through a rapid change. The education level is rising. Earnings are rising. There are very different people nowadays than when I started in real estate in the late 1980s. Thirty years ago, Amsterdam was still a city of dockworkers and office clerks. Higher educated people lived outside the city. This has structurally changed in recent years, but home ownership is still low. That used to be the case with twenty percent owner-occupied homes and today, with a market share of just thirty percent, it is not that different from a technical point of view. That causes scarcity. This is so great that there will always be upward price pressure. If, subsequently, the population grows and the composition of the population changes, then the pressure becomes proportionally higher. ”According to him, that price pressure makes the flow stagnant. Or that more people are leaving the city, because that suitable home cannot be found.
 
Rising prices
 
Kemp predicts further rising prices for the coming year. He looks to the past for that. “Today, the average house price is ten percent above the average price in 2008. It may sound strange, but if we then take inflation into account over that period, then there will even be a slight fall in prices.
 
If we realize that the interest rate is half as high as it was then and the average income has risen faster than inflation, then a house in an absolute sense seems expensive but that is not the case. The difference is that people today are saddled with an enormous obligation to repay. A number of potential buyers cannot bear that financially, but people are creative. There is a relatively large number of buyers with a share of their equity from the surplus value of the previous house or family. They are en masse looking for financing constructions where they do not have to pay off. The low interest rate then ensures a low housing costs. "

The NVM signaled a break in growth in the second and third quarters of this year in Amsterdam - the market cannot constantly keep up with price increases - but, according to Kemp, price increases have continued since October. “We definitely notice price increases up to a price of 1 million euros. Moreover, new-build production is declining. The number of building permits is declining. Politicians want fewer owner-occupied homes. And the land is expensive. All these factors result in fewer building plans; so even more scarcity. "
 
More houses
 
Not only is there a scarcity on the owner-occupied housing market; the free rental market is also very tight. What can the city do? “We have to build more homes in all segments. Whether it is small studios for students or young people, larger homes for families, attractive apartments for the elderly or very exclusive homes in the highest price segment. Everything must be built and more must be built, "says Kemp. “My other slogan is: by banning all kinds of things, we no longer get homes and therefore we don't solve the problem. The Amsterdam city council is trying to ban everything - take the latest proposals on limiting housing parts - but it leads to fewer people per home, so the problem gets bigger. "
 
The region must do more work on housing at public transport locations, believes Kemp. He is thinking of housing in Diemen, Weesp, Hoofddorp or Zaanstad.

“Not everyone can live in hip East or hip Oud-West. Moreover, it appears to be complicated to develop the available inner city locations. I know many places where hardly anything has happened for twenty years. Take the redevelopment of a huge area at the Schenkel. Or the redevelopment of the Central Wholesale Market. Thousands of people could live well there, but we don't dare to build. Permit processes also take an extremely long time. We have two projects for sale in Asscherkwartier; there is a lead time of fourteen years. So we have to make the city bigger. Good public transport and attractive bicycle connections can ensure that home seekers find a good alternative at those stations. ”

Consumers also need more professional guidance, Kemp emphasizes. "We must be aware that the" consumer journey "will be very different. There is not only communication at the viewing or at the sales event. People assess the product 24/7. They decide from their smartphone or iPad whether a home interests them. If something goes wrong, the broker loses a buyer. "
 
Kees Kemp
Kees Kemp has been active as a broker for 31 years. In 2018 he sold Funda's most expensive house. Van Eeghenstraat 80 was for sale in Amsterdam for an asking price of more than 18 million euros. His office has been the market leader in the segment with an asking price above 2 million euros for many years, but that segment is small in Amsterdam.
 
BRON: Vastgoedjournaal