Weak outlook housing market, offers opportunities as well.

On March 2, 2012, In Buying a Property, Selling a property, By admin
The Data and Research Department of the NVM (the leading association of Dutch real estate brokers) recently surveyed its members for their opinion on the current state of the domestic housing market. The survey was carried out in the period 22 December 2011 – 3 January 2012 and there were 734 responses.
Rating
The average rating given by respondents was 4.0 on a ten-point scale. This is slightly higher than the rating from mid-2011. The current economic climate and economic prospects for the coming year dominated the market outlook. The media was regarded as an important factor in creating negative sentiment and depressing the market. Positive aspects and opportunities in the current market received limited coverage. The ongoing discussion regarding the mortgage interest deduction has also inhibited housing sales. While preservation of the deduction is no longer the key to boosting the market, clarity on what will (or could) happen regarding this deduction and when changes could occur is considered critical.

Netherlands Housing Market

Netherlands Housing Market

Opportunities
In the wash of negativity, it is easy to forget that there are a lot of opportunities in the current market for making a good purchase. For instance, the combination of a lower prices, lower interest rates and the changes in rental regulations have made “buying-to-let” a very viable strategy for generating returns from real estate investments.
Another positive aspect is the fact that transfer tax will remain at 2% until 1 July 2012 after which it will revert to 6%. In other words; a house of € 250.000,- is € 10.000,- cheaper!
Current market circumstances have lead to an increase in the quality of properties for sale while prices have dropped. If you are considering buying residential real-estate, keep in mind that, more than ever, value is determined by location and quality and that there are some excellent deals out there.
If you are considering buying in the Netherlands, feel free to contact our real estate specialist Johan Grijzenhout  for any questions; visit his website Perfect RealEstate or call +31 (0)20 524 1140
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The costs of buying a property in The Netherlands

On March 20, 2010, In Buying a Property, Property buying costs, By admin

Property buying costs

Following my recent posting on buying a property in The Netherlands, I had a couple of mails asking about the costs of buying a property in this fine, flat land we call home.

Unless you are internationally famous, astoundingly wealthy or both, most of us will start by setting a budget and testing our lending power with a couple of friendly banks. If you are looking to secure a mortgage in The Netherlands, then you might consider one of the following major banks: Rabobank, ABN AMRO, ING Bank, SNS Bank. It is worth engaging a mortgage broker to find you the best deal among the different banks and products. There are many to choose from but if you are non-Dutch with a pension here, assets there, and investments somewhere else then you’ll need to find broker who can properly consider your situation and not simply push the mortgage from the first bank to express interest. Perfect Financials is worth having an orientation discussion with.

When calculating your overall budget, keep in mind that you will be responsible for a number of additional costs on top of a mortgage. In the Netherlands, these costs are typically between 8 – 10% of the total purchase price. I know, I know – this is legalised robbery. The only thing you can do about this is go and live in another country. These costs are distributed over the following elements:

  • Transfer tax (overdrachtsbelasting)
    The transfer tax is currently 6% of the purchase price of the property.
  • Appraisal (taxatie)
    The standard price for an appraisal is 0.2% (excluding VAT) of the purchase price but may be negotiated down. We can help can arrange a professional appraisals for around EUR 390,00 (including VAT) with an appraiser is our network. Appraisal costs are tax deductible.
  • Presale agreement (koopovereenkomst)
    The presale agreement costs are typically 0.3% (plus BTW) of the purchase price.
  • Transfer contract (akte van levering)
    The transfer contract costs are typically around 0.3% (plus BTW) of the purchase price.
  • Mortgage contract (hypotheekakte)
    The costs associated with the mortgage contract are around 0.15% (excluding VAT) of the purchase price. The mortgage contract costs are tax deductible.
  • Mortgage brokerage fee(afsluitprovisie)
    The cost of brokering the mortgage is typically 1% of the mortgage, which is generally about 1.2% of the purchase price. The mortgage brokerage fee is tax deductible.
  • Real estate agent commission (makelaarscourtage)
    Real estate agent commissions differ, but the average rate is 1.85% (excluding VAT) of the purchase price. At Perfect Real Estate this fee is only payable once we successfully find you a home.
  • Translator fees
    Buyers who are non-Dutch speakers can request an interpreter be present during the signing of documents. The costs (variable) are at the buyer’s expense.

With the exception of the transfer tax and the presale agreement costs, most of these costs are negotiable.

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