Residential property in Amsterdam: Demand from abroad adds impetus to the market upturn
Residential property in Amsterdam:
Demand from abroad adds impetus to the market upturn
- Buyers from China and Russia use chance for attractive investments
- Prices per square metre of up to 9,000 euros in prime locations
Hamburg/Amsterdam, 30 January 2013. In the fourth quarter of the previous year, prices for residential property in Amsterdam rose by 1.9 percent on average over the preceding quarter in 2012. They haven’t yet reached the same level as the previous year nonetheless, as prices dropped by around seven percent during the first nine months of 2012, the bottom seems to have passed however. The reason for the temporary price reductions is the restraint being shown by Dutch banks when it comes to mortgage lending. It is resulting in stagnation in the level of demand from domestic buyers on the first home market at present.
“Due to the slight drop in prices for a period, the demand from abroad nevertheless rose significantly,” reports Barbara van der Grijp, Managing Partner at Engel & Völkers in Amsterdam. “Prices are still lower than the level in the previous year. But we are expecting prices to stabilise out once again over the coming twelve months as a result of this growth in foreign demand,” Ms. van der Grijp explains. In her estimation, this market expectation makes this the perfect time for many interested buyers from abroad to invest in a high-end residential property in the Dutch capital. Traditionally, the group of foreign buyers has been dominated by the Brits, French and Germans. In the past year, increasing numbers of prospective buyers from Russia and the emerging economy China have been registered on the market. There have also been buyers from Israel and Australia in individual cases.
Prime property on the waterfront remains an attractive prospect
The demand from foreign buyers is focused mainly on exclusive properties in Amsterdam’s prime locations. The areas in the historic city centre are particularly desirable, and above all here the main canals Herengracht, Keizersgracht and Prinsengracht as well as the tributary canals Leidsegracht, Lauriergracht, Bloemgracht and Egelantiersgracht. “These premium addresses remain largely unaffected by the price reductions of the past year, as the supply in properties is extremely short. Homes in these top locations are therefore highly sought-after amongst international buyers as these are precisely the properties that prove to be particularly stable in value. Rather than “bargain-hunting”, many clients are looking to invest in a prestigious property with long-term potential for appreciation in value.” Ms. Van der Grijp commented. Top prices of up to 9,000 euros per square metre are being reached here for townhouses and freehold apartments at sought-after premium addresses.
Also very popular amongst international buyers is the museum quarter Oud-Zuid Amsterdam and the area surrounding the Willemspark. Buyers can expect prices here of between 5,000 and 6,000 euros per square metre. Attractive investment opportunities are also on offer in the up-and-coming Amsterdam-Noord region, where a square metre of real estate currently costs between 2, 500 and 4,000 euros.
In the historic city centre, it is the pied-à-terre apartments along the canals that are in high demand. An immaculate, renovated condition and a high-end modern appointment are amongst the most important purchase criteria here. A balcony or terrace is also a purchase prerequisite for many buyers from outside the Netherlands. In Amsterdam-Zuid, apartments in prestigious new developments are also sought after.
Amsterdam traditionally ranks amongst the most important trade gateways in Europe and is the site of many international companies. The rich cultural heritage, long trading traditions and historic architecture add to the appeal of an investment in a high-end property in this cosmopolitan city both for private and institutional buyers from around the world. “Compared to other major European cities such as London or Paris, prices in Amsterdam are extremely reasonable. We certainly think there is upward scope here though, in light of the great interest we are seeing from foreign buyers,” Ms. van der Grijp concluded.