Falling Netherlands house prices leave owners stuck

Thrugelmir

The credit crunch continues to rumble on.......

this is not just a story of over-optimistic lenders who tempted the Dutch to pile into property in the mistaken assumption that it would continue to rise in value.

The housing dam has broken. Holland is sitting on some 650bn euros in mortgage loans, with many properties worth 25% less than they were before the financial crisis.

No other EU consumers are as deeply in debt. The bursting of the Netherlands real estate bubble is now on a scale only previously seen in the United States and Spain.

http://www.bbc.co.uk/news/business-23681604

chucky

Thrugelmir wrote: »

The credit crunch continues to rumble on.......



http://www.bbc.co.uk/news/business-23681604

It's all a bit different than the UK...

For some, the Dutch experience provides an economic lesson of the risks for a prosperous economy caught up in a post-bubble crunch when it has ceded control of its monetary policy, interest rates and currency.

antrobus

....The bursting of the Netherlands real estate bubble is now on a scale only previously seen in the United States and Spain.

What about Ireland? I thought house prices had halved over there?

The interesting bit from the BBC report;

For some, the Dutch experience provides an economic lesson of the risks for a prosperous economy caught up in a post-bubble crunch when it has ceded control of its monetary policy, interest rates and currency.

Oh, someone agrees.

Loughton_Monkey

One possible future escape route for some stressed homebuyers might be tapping into their accrued personal pension funds - if they have any.

It is an idea under active consideration in a country now exploring any possible avenue to escape a debt crisis of its own making.

Frying pans to fires?

ManAtHome

Sounds like the usual looneyland of 'no more boom and bust' (TM) to me...

But this is not just a story of over-optimistic lenders who tempted the Dutch to pile into property in the mistaken assumption that it would continue to rise in value.

then go down 1/2 a page

When she was in the market to buy, she borrowed some 200,000 euros, but was told she could borrow almost 500,000 euros - and many did just that.

ruggedtoast

"If you went to a dinner party before the crisis and told people you were renting a house, people would probably consider you financially backward.

Good god. Do they even have homeowners dinner parties over there?

michaels

ruggedtoast wrote: »

Good god. Do they even have homeowners dinner parties over there?

They are actually fairly civilised in a way the English would recognise (and indeed do tend to speak good English).

What may be more interesting although I don't know the figures is that we might be seeing a housing crash in a country that didn't see a huge house building boom nor a construction led surge in unemployment and that has seen considerable immigration...sound like a set of circumstances that are supposedly preventing a crash happening in another north European economy?

Generali

One reason for the very high level of debt is, AIUI at least, that there are tax advantages to maximizing your mortgage debt in the Netherlands.

mystic_trev

Generali wrote: »

One reason for the very high level of debt is, AIUI at least, that there are tax advantages to maximizing your mortgage debt in the Netherlands.

Indeed. There's a wealth tax in the Netherlands, which makes (or made it) tax efficient to take out the maximum mortgage possible.

ruggedtoast

Generali wrote: »

One reason for the very high level of debt is, AIUI at least, that there are tax advantages to maximizing your mortgage debt in the Netherlands.

Thats ended now afaik, my Dutch friends have all put off buying because they were worried about what would happen to prices.

OffGridLiving

I find this sort of alarmist journalism tiresome when it's in the Daily Mail, but it's annoying when it's on the BBC.

This line sums it up "The housing dam has broken. Holland is sitting on some 650bn euros in mortgage loans, with many properties worth 25% less than they were before the financial crisis. "

The 650bn euros in mortgage loans has no relevance unless they quantify how much of that 650bn euros is at risk. It's more than likely that most of the 650bn mortgage loan is perfectly satisfactory and sat with borrowers with decent savings and excellent LTVs.

The second part of the statement "many properties worth 25% less", well, how many properties? What percentage of the 650bn euros of mortgage loans are against these 'many' properties that are worth 25% less?

Sorry to go on, but this is really sloppy journalism, probably written by a hack with zero financial experience. Poor stuff from the BBC.