The icy fingers of the credit crunch have finally reached Holland and, whilst the seemingly invincible market of the Netherlands can no longer claim to be the only euro-area country to have rising property prices, the UK can still learn something from their housing market…
Up until a few months ago, the effects of the American mortgage crisis and subsequent credit crunch seemed to have barely hit the Netherlands. The property market seemed to be, against all odds, still thriving, and it was the only euro-area country among 11 surveyed by the Global Property Guide with rising property prices as late as the second quarter of the year.
But then something started the ball rolling and the immunity was cracked. Fortis, one of the largest banking and insurance companies in the Netherlands, was nationalized at the end of September.
What’s more, it was nationalised by no less than three countries; Holland took over 49 per cent of the insurance branch and paid £2 billion, Belgium paid £2.5 billion for the same percentage of the banking branch, whilst Luxembourg invested around £1.2 billion in the Luxembourg based interests of Fortis.
And, just like that, the part nationalization brings the credit crunch to the Netherlands. Now, the country is concerned that the financial sector may collapse like a house of cards, as property prices start to fall rapidly.
More Dutch home sellers are cutting their asking prices and average prices slipped by three per cent quarter on quarter in the last part of this year, according to the Dutch Realtors Association.
What can we learn from Holland?
Holland has long been one of the world’s forerunners in social housing policies and they have a traditionally strong and stable housing market.
Whilst the country boasts a high stock of affordable housing, the thing that really sets the social housing apart is a culture that supports rather than stigmatises social housing. Shelter Chief Executive Adam Sampson, says, “In Holland, 2.4 million homes are rented from social housing schemes but there is no stigma to this.â€
Only 18 per cent of British households rent their home from councils, housing associations and cooperatives whereas around a third of homes in Holland are designated social housing – and in Amsterdam that increases to cover every other household.
With the rate of repossessions expected to hit 45,000 in the UK this year – a whopping increase from 26,200 last year, housing campaigners are now looking to Holland for inspiration on how to create a system of effective social housing for a new generation.
But, back to the credit crunch and Finance Minister Wouter Bos has predicted that the Dutch economy may contract in 2009 for the first time in 27 years, as home sales fall by 13 per cent as we reach the end of this year.
Already the Dutch slowdown is having knock on effects. A multi-million pound plan to redevelop Hove seafront is in tatters after its financial backers pulled out because of credit concerns.
Dutch bank ING had been due to fund the £290 million redevelopment of the King Alfred leisure centre, designed by Architect Frank Gehry.
But ING Real Estate said volatile money markets and the housing market downturn meant the project was no longer viable.
For more information on Netherlands properties and the market in general, please visit http://netherlands.themovechannel.com/
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