Average-Income Earners Face €100,000 Shortfall to Buy a House in the Netherlands

Average-Income Earners Face €100,000 Shortfall to Buy a House in the Netherlands

According to the first housing market accessibility monitor by the Netherlands Bureau for Economic Policy Analysis (CPB), people earning an average income in the Netherlands are more than €100,000 short of the funds needed to purchase the typical home sold in 2024. Without dual incomes, generous parental support, or significant savings, middle-income households are effectively locked out of owner-occupied housing. This stark finding highlights growing affordability challenges and underlines the need for long-term policy solutions.

Sharp Gap Between Wages and Home Prices

Between 2015 and 2024, home prices in the Netherlands have surged far beyond the growth in average incomes. In 2024, the average sale price for an owner-occupied home climbed to €451,000. For a household earning around the median income, securing a mortgage on that property requires bringing over €100,000 in additional equity to the table—either in personal savings or from a second income.

Prior to 2018, a single average-income earner could typically access a full mortgage based solely on salary. However, since home prices began ascending more steeply than wages, banks have tightened lending criteria and insisted that buyers contribute significant down payments. As a result, average-income households now struggle to meet the minimum equity requirements.

Declining Accessibility Since 2015

Back in 2015, households with a median income could afford roughly 61 percent of the homes available on the Dutch market. By 2024, that share plunged to just 21 percent, according to CPB analyses. For single-earner households, the situation is even more dire: only 2 percent of properties remain within reach without outside assistance.

Emile Cammeraat of the CPB commented, “Single-person households with an average income can only buy 2 percent of the available homes. The gap between wages and housing costs has widened dramatically.” This trend poses a significant barrier to homeownership, particularly for those just entering the market.

Impact on First-Time Buyers

First-time buyers—often younger adults with limited savings—feel the pinch most acutely. They typically earn less than established homeowners and lack the equity gained from a previous sale. As a consequence, many prospective buyers under 35 find themselves dependent on family support or forced to continue renting longer than they expected.

Examples of the hurdles faced by first-time buyers include:

• Struggling to accumulate the life-long savings required for a minimum down payment.
• Being ineligible for gifted capital due to gift tax thresholds.
• Difficulties meeting stricter post-2008 lending rules that cap borrowing at 100 percent of a property’s appraised value.

Regional Variations and Urban Challenges

While affordability has worsened across all provinces, the largest Dutch cities are the hardest hit. In major metropolitan areas, accessible homes for median-income earners have fallen to 18 percent of the stock. In Amsterdam and Utrecht, affordability levels are among the lowest in the country.

High demand, limited supply, and premium pricing in these urban centres exacerbate inequality, forcing average-income households to consider commuting from more affordable suburbs or continue living in the rental sector.

Policy and Market Solutions

The CPB emphasises that there are no quick fixes. In the short term, boosting supply remains the most straightforward remedy, but the government’s annual target of 100,000 new homes has repeatedly fallen short due to nitrogen emissions regulations and a shortage of construction workers.

Additional proposals include:

1. Subdividing existing homes: Allowing larger residences to be split into multiple units can rapidly increase available housing without new builds.
2. Adjusting tax incentives: Reducing mortgage interest deductions and lowering the notional rental value could curb excessive bidding and cool price inflation.
3. Relaxing lending standards moderately: Revisiting the cap that limits borrowing to 100 percent of the appraised value might help, but risks repeating the 2008 crisis scenario when loans exceeded property worth.

Despite these options, the current coalition agreement has ruled out changes to mortgage interest relief, leaving many middle-income buyers reliant on traditional solutions: higher savings or dual incomes.

Looking Ahead

Long-term strategies will need to focus on sustainably increasing supply, streamlining construction processes, and balancing fiscal incentives. For average-income earners, a combination of these measures offers the best chance to bridge the growing gap between wages and housing costs.

Whether you’re planning to buy your first home or exploring rental alternatives, understanding the evolving market dynamics is crucial. For an easy way to search rental listings across the Netherlands, consider using Luntero.