Comment by IkmoIkmo | Hacker News Reader

Comment by IkmoIkmo | Hacker News Reader

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Not sure why the amen is applicable to Dutch cities. I'll take the local perspective from Amsterdam as an example, but it applies more broadly to the other cities as well here.

Regarding point 1:

There's no real issues with long-term vacancies (the municipality already has laws in-place which fine owners of vacant homes), typically sits between 1 and 2%. That should obviously go down to 0 as much as possible, but it's clear that (1) the problem has an extremely minor effect on the market, (2) it's not exclusively caused by investors, a lot of them are pied-a-terres or homes owned by temporary migrants working abroad and (3) the problem of vacant homes that can be attributed to investors, can be addressed in many other ways than a total ban.

In other words, not an effective or suitable policy on this point.

Regarding point 2:

The price increases aren't caused by investors in Amsterdam, studies have shown this over and over again. If buy-to-let is banned, rental supply drops, rental prices go in overdrive, and there'll be more pressure to buy under any circumstance. The have-nots who're unable to buy will be even worse off. There's no magical panacea to a lack of sufficient supply.

You mention a couple points around 2nd homes, which are fair. I think in a world where there isn't enough housing for everyone, we should at minimum disincentivize owning second homes that go unused most of the time. But apart from the fact that Amsterdam is the capital, a working town, not a place where people have second homes that they enjoy on the weekend, this policy doesn't address 2nd homes at all. You're not banned from buying and owning a 2nd home in Amsterdam after this policy goes into effect.

In other words, an entirely ineffective policy regarding point 2.

Studies have shown that in the Netherlands only a tiny part of the rapidly increasing price is due to shortage and the majority due to investers. The exact opposite of what you say.

I'm not saying you are wrong. I'm saying that what you pose as established facts are highly debated in the Netherlands at the least.

I'm on mobile, so finding English studies is hard. Maybe parent author could cite some of the studies (s)he mentions? https://www.eigenhuis.nl/huis-kopen/starters/artikelen/beleg... https://www.kadaster.nl/-/opkomst-particuliere-investeerders...

So the study you referenced was ordered by the Minister of the Interior, and it's been the most heavily cited study in the past few years.

If you read it, you'll find it explicitly states they could not establish a causal relationship between investors and increased prices. (i.e. it says exactly what I stated).

They do find a correlation (which is heavily referenced in the news and misinterpreted), which would be expected. Investors who study the market and are investing professionally, are more likely than the average, and definitely more likely than below-average, to invest in neighbourhoods which turn out to see more price increases than neighbourhoods that investors chose not to invest in. That's of course because it's their job and their expertise. It doesn't mean they're causing the price increases.

It's a bit like saying there's a correlation in prices between prices of stocks of companies that professional investors choose to invest in or not. That's obvious, professional investors seek returns, and are expected to invest in such companies. But the investors aren't causing the tech stocks to become valuable. They simply are, by way of their profits. Google (once established) isn't high-value because investors choose to buy its shares. Investors detect the value and pursue to own it. Real estate is no different. Which is why the study found a correlation, but explicitly did not establish a causal relationship.

About point two:

Both supply and demand are incredibly constrained: building new houses is slow and not exactly being stimulated by the government, whereas demand is fixed because people need a place to live.

Property rental is an extremely attractive investment opportunity. Demand is guaranteed and due to the low cost of obtaining money it is basically risk-free. Even at near-zero rent you'll still make a profit - as long as the housing market doesn't crash.

On the other hand mortgages always carry some risk, and banks are aware of this. There are quite strict limitations on the amount you are allowed to borrow. This directly means that individuals will always be outbid by investors.

This directly results in price increases. Individuals are now no longer able to buy a home, forcing them to rent. Landlords, in turn, are happy to let you rent a property which you wouldn't be able to afford because it is way easier to evict you. And because demand is higher than supply, they'll happily increase the price. Rent prices are already in overdrive.

So now you're paying €1200 in rent instead of €800 in mortgage payment - for the same property.

Banning buy-to-let would result in a sale of the properties currently being rented out - which means a drop in the housing price. Rental supply will drop, but those houses don't magically disappear! People who previously were unable to get a mortgage can now suddenly afford to buy instead of rent. This lowers the demand for rentals, which decreases rent.

People don't need landlords - they need homes. With the exception of a very small number of short-term rentals, landlords provide zero value. Removing them from the equation decreases the prices for everyone.

Show your sources. I've read the exact opposite of what you claim.

The CIA even lists the Dutch housing market as the largest risk factor in the stability of the Dutch housing market.

> Show your sources. I've read the exact opposite of what you claim.

For example: https://www.kadaster.nl/documents/1953498/3407456/Onderzoek+...

Happy to read your sources as well.

> The CIA even lists the Dutch housing market as the largest risk factor in the stability of the Dutch housing market.

I don't understand?

The problem is not only in Amsterdam, and for anybody wondering how crazy the situation is at the moment this is a realistic, up to date view:

"The WILD Dutch housing market and our home buying flop | American in the Netherlands"

https://youtu.be/dFXsfeEEVAM

> If buy-to-let is banned, rental supply drops

This seems to contradict your earlier claim that:

> the municipality already has laws in-place which fine owners of vacant homes

A house which is being rented isn’t vacant.

I don't see the contradiction, could you explain?

If "rental supply drops", that means the people who own apartments they don't live in won't let them out. If they don't let them out, they're subject to the anti-empty-apartment laws.

The problem is that there can be NO new rentals on the market, because you can’t buy a home and rent it out. If someone is renting out a property and then decides to sell it, that is one less rental on the market that can’t be replaced. Any house that is bought can’t be rented out ever, so there is no new rentals.

No, the owners who are grandfathered in rub their hand in glee, as over time only own-to-occupy buyers are allowed, thus the supply of rentals goes down and rentals become more expensive, thus making their rents higher and more lucrative.

The answer is to reduce the centralization of jobs and other factors that cause everyone to want to live in Amsterdam, e.g. building out Lelystad or Buitenveldert. To a certain extent, COVID and WFH has started doing that.

I lived in Amsterdam in 1999 and house prices there seemed quite reasonable to me compared to Paris where I was coming from, but of course many things may have changed in two decades.

> thus the supply of rentals goes down

You're sort of "begging the question" here.

> The answer is to reduce the centralization of jobs and other factors that cause everyone to want to live in Amsterdam

Obviously I'm not against that happening but it's not either-or.

> but of course many things may have changed in two decades.

Oh, you have no idea. It was hard to even get the owners to get back to you, because they'd already accepted an offer; and I was being asked for 1,500 EUR - 1,650 EUR/month for a bedroom+living room apartment. And while that wasn't in Diemen or Bijlmer, they weren't in posh super-central locations.

The Netherlands is just too rich that it is working against itself. We have created a society where every person wants their own house- 17 million people 10 million houses. And the Netherlands is a magnet for migrants- compared to most of the world the streets are paved with gold.

And no matter how much the prices go up people can and will pay. Unless there's a mayor economic recession things will not get better.

> 17 million people 10 million houses

Wait, you’re making it sound like this is an obvious case of not enough supply — which could potentially be solved by building more homes! — but in fact, it’s the total opposite: the average Dutch household has 2.14 people, so that’s 8 million households vs. 10 million houses! (I assume this is overwhelmingly folks who want to live together: partners, kids, etc., not just folks who can’t afford to live alone.)

Sounds to me like there are 2 million extra houses, not 7 million missing ones.

So what, exactly, causes the problem? Presumably, those 2m extra houses just aren’t in the right places?

there are 7.9 million homes in NL. The shortage is 279.000 vs 331.000 before corona (killing 18.035)

2.14 per home vs 3.54 in 1961.

I have no explanation why 17280000 / 7900000 = 2.187

People pay because it is still the best choice for the non-financially-savvy to secure their net worth given the policies our government has made the past few years. Someone else already explained how renting costs way more, and people would argue the break-even point for renting vs buying is only about 1 to 2 years. That's without taking into account all the restrictions landlords are putting up.

Once you get past the hurdle, banks give you insane amounts of money to buy these insanely priced houses with. And due to the low rent, you're not that much worse off than 5 years ago. Since no one who buys a house today wants to end up losing out, many homeowners will vehemently oppose any measure which could make the prices sink, so more borrowed money, so even higher prices as long as there isn't a suitable alternative (cheaper/affordable and easy to attain rent).

I wonder if Amsterdam specifically is filled with single-family houses. I suppose some larger apartment houses must exist, housing a few families.

There are apartments, but construction in the desirable areas is limited.

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