Since the global credit crunch hit the Netherlands last year, the housing market has changed considerably. However, despite the insecurities in the current economy, the purchase of an apartment in Amsterdam will be a good investment on the long term.

More apartments are up for sale in Amsterdam compared to the same time last year, which means more choice for buyers. The current climate also gives prospective buyers more time to reconsider apartments they have viewed as well as more room for negotiation.

Moving from a sellers' to a buyers' market
Many buyers reacted with caution at the onset of the credit crunch; taking a wait and see approach, while others stepped out of the market completely.  However, less competition has translated into more opportunities for buyers.

The mortgage is an important factor in your monthly costs. Lower interest rates make taking out a new mortgage more affordable, and, in some cases, it is cheaper to buy an apartment than to rent one. However, banks have a different way of looking at your income status, and lending has dropped significantly. So make sure you know what you can afford, before you buy your house.

Before starting your housing search, it is advisable to meet with a mortgage advisor at the bank, or a specialised mortgage advisors agency. This will help you to get a realistic view of the housing market in Amsterdam and target the price range in keeping with your financial situation.

Buying a house often involves an investment of hundreds of thousands of euros and acting on incorrect information can result in expensive mistakes.
Here are some common misconceptions, along with the facts to set you straight.

Prices per sq metre
When a home is sold based on the cost per sq metre; this does not necessarily mean that the price per sq metre or value of other houses on the same street or in the same neighbourhood is identical.  For instance, the costs of two homes of the same size can differ considerably if one of them has a garden and the other only a balcony, or if one of them is in a bad state of repair and the other has been renovated. The price per sq metres merely serves as a guideline in determining the value.

Foundation code
When no data is available on the state of the foundations this doesn’t necessarily mean that they are of poor quality. Conversely, if a building has been assigned a foundation code of II, this does not mean automatically that the foundation will never need to be replaced or that it has already been repaired. Often, the quality of a foundation is assessed by inspection, which frequently provides a reliable overall indication, but does not say anything about the quality of the wood.

Division
The fact that a home has recently been divided into smaller units does not necessarily mean that the structural aspects of the unit sold are of high quality. Although certain quality requirements apply when homes are divided into small units, the prescribed standard is not always met. However, there are also many developers who build according to much higher standards than required, which also affects the value.

Ground Lease
The majority of homes in Amsterdam are built on ground lease land, which has economic disadvantages for homeowners.  Although it is true that it is better to own the land yourself than to lease it, there are many situations were it is acceptable to own a house on land lease ground; for instance, in situations whereby the yearly ground-rent for the coming years will remain reasonably stable and relatively affordable.   

The best situation possible is when the period of 50 years has been paid in advance by the owner or seller of the house or apartment. Pay attention on the end date of the current period. If the end date is in a couple of years, it could have a negative influence on the buyer.

Note that the yearly amount for the land lease for your own home is deductible for your annual income tax.

Asking price
Some people think they have gotten a good deal when they have paid 10 percent less or “only EUR 10,000" more than the asking price. However, the asking price is a variable; it is determined by the seller and estate agent for the purpose of inviting offers. Often, the asking price is realistic, but it can also be too high or low. Buyers are well-advised to base their choices on the market value, not the asking price.

Negotiations
You are not in negotiation with the selling party when you have made an initial offer for a house. You are only in negotiation when the seller or his estate agent makes a counter offer or when they explicitly mention that you are in negotiation. Neither are you in negotiation when the seller’s estate agent informs you that they are going to discuss your offer with the seller.

Even though you are in negotiation, the seller’s estate agent can still continue showing the house to other parties since a negotiation doesn’t necessarily lead to an agreement.

Working for whom?
Often people assume that the seller’s estate agent is a mediator between parties; the seller and the buyer. However, an estate agent cannot look out for the best interests of both parties and will always work for the best interest of one party. Please make sure you understand which side the estate agent is on. If it is not your estate agent, they will most likely work in the best interest of the seller and inform you only of the things that the seller is obliged to. It will therefore be recommendable to take your own estate agent with you, who will be there to protect your own interests.

This information was supplied by Experts at Finsens and Finsens Makelaardij .

Updated by Michiel Jelgerhuis, Finsens Makelaardij on 26 March 2009.