Engel & Völkers Licence Partner Hondarribia and Irun > Blog > Amsterdam: Demand for residential property continues to rise

Amsterdam: Demand for residential property continues to rise

Its cosmopolitan flair and historic charm make Amsterdam a European  city without parallel. Despite the coronavirus pandemic, the real estate market in the Dutch capital  remains on a strong course of growth. “In the first quarter of 2021, prices for residential properties in  Amsterdam increased by around 8 percent over the same period last year. The reason for this positive development is the significant surge in demand from domestic and international buyers,  coupled with the limited availability of properties on the market,” says Tjerk van der Linden, Managing  Partner of Engel & Völkers in Amsterdam. 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 that is relocating from abroad. At the same  time, Amsterdam will remain in demand as a place of residence for domestic clients too.  

 Hondarribia, Spain
- In the prestigious Apollo neighbourhood in the south of the city, Engel & Völkers is brokering this exclusive residence for 5.1 million euros. The brick mansion was built in 1930. It boasts 474 square metres of living interiors, as well as a garden. With its seven bedrooms, two bathrooms, commodious basement level and garage, the property offers ample space for a large family looking for a central home with suburban flair. (Image source: Engel & Völkers Amsterdam Zuid)

Attractive locations and quality of life put international clients into buying mood 

Thanks to the business-friendly environment in the Netherlands, many multinational companies and  start-ups have relocated their headquarters to Amsterdam. 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 percent of the real estate market, 40 percent 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.  The 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 euros. “Supply is meeting demand in the luxury segment. Rising prices over recent years demonstrate how stable the market is, and offer investors and private buyers long-term  security,” says Tjerk van der Linden. 

Upward price curve for properties in historic city centre  

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 commanded top prices of up to  12,000 euros per square metre in Q1 2021. Canal houses changed hands for as much as 8 million  euros in the same period. 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 euros. Detached family properties sold for  peak prices of up to 10 million euros. 

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 were 12,000 euros per square metre in Q1 2020. Sales prices for houses in this neighbourhood, some of which were built in  brick in the style of the “Amsterdam School”, were up to 8 million euros. 

Real estate markets in regions around Amsterdam are flourishing 

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 families,”  says Tjerk van der Linden, adding: “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-and-coming locations with a high potential for appreciation in  property prices are Bloemendaal, Haarlem, Warmond, and various villages in “het Gooi”. 

Outlook: The run on real estate will intensify with green visions for the future 

“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,” says  Tjerk van der Linden. In the middle of the first lockdown last year, 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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    E-mail: hondarribia-irun@engelvoelkers.com

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