First-time buyers on the Dutch housing market

Abstract

Ensuring good living accomodation is a constitutional duty of the government, but there is now a shortage of 300,000 homes. Demand for housing has grown sharply in recent years. In the last two years, the housing market issue has been high on the political agenda again. In it, the issue of starters regarding home ownership occupies a prominent place.
The importance of first-time buyers and the benefits of home ownership has therefore not remained underexposed. The inflow of ‘new’ households into the owner-occupied housing market not only stimulates movement but also provides the necessary liquidity. Partly due to quantitatives shortage, the position of first-time buyers is said to have continued to deteriorate. In the formulated housing policy, the quantitative housing demand is therefore emphatically central. Being able to realise the stated policy objectives - suitable and affordable housing for starters - depends on the demand exercised. Such policy requires accurate knowledge about the position occupied by first-time buyers in the (owner-occupied) housing market.

This research focuses on the (changing) position of first-time buyers in the Dutch housing market. The research question answered in this respect is: What is the position of first-time buyers in the Dutch housing market and how has this position developed from 2009 to 2021?

To arrive at this position, an insight needs to be gained into how first-time buyers operate on the housing market. For this, the ‘housing market’ needs to be explored first. Therefore, this research firstly discussed the background developments prior to the data analyses.
The data research is divided into three parts. Firstly, the concept of ‘first-time buyer’ is explored in more detail whereby various profiles are identified. Next, the various distinct households are researched with respect to the demand for owner-occupied housing. Finally, a model-based analysis of housing market accessibility and success rates for these households is provided. The research results conclude to five main findings. Firstly, whereas the absolute market entrance declines lightly, the relative influx decreases sharply. The total demand for housing from both aspiring first-time buyers as well as homeowners has grown sharply. Secondly, the most current houses are not current, meaning the demanded housing is scarcely available in the most demanded regions. Thirdly, the results show that it is increasingly the high-potential households that find their way into the market. Fourth, the position of first-time buyers has been increasingly determined by the total competition, as the affordability seems not to be the issue. This is mainly rooted in low interest rates. Lastly, the general succes rate among first- time buyers decreased while the diversity among these households has increased.