First-Time Home Buyers in the Netherlands Depend Increasingly on Parental Gifts

First-Time Home Buyers in the Netherlands Depend Increasingly on Parental Gifts

Entering the housing market for the first time has never been more challenging in the Netherlands. High prices, fierce competition, and limited supply are forcing many young buyers to turn to an unlikely source of support: their parents. According to the 2024 Housing Survey by ING, more than 30% of first-time buyers received a financial gift from their parents last year—up sharply from 19% in 2021. As average parental contributions climb, so do housing costs and concerns about widening inequality.

The Rising Role of Parental Contributions

The ING survey[^1] highlights a clear shift in how first-time buyers fund their property purchases:

• Higher participation rates: In 2024, 31% of first-time home buyers benefited from a parental gift, compared to just 19% three years earlier.
• Larger gift amounts: The average sum provided by parents reached €58,000 in 2024, up from approximately €40,000 in 2018.
• Extreme outliers: Around 9% of all first-time buyers received €100,000 or more from their parents. Among recipients, one in four secured gifts exceeding six figures.

These figures underscore a growing dependency on family wealth to bridge the affordability gap. For many buyers, parental support makes the difference between bidding competitively and being priced out of desirable neighbourhoods.

How Parental Gifts Drive Up Prices

ING warns that generous parental gifts accelerate price inflation in an already overheated market. When some buyers can rely on large down-payments, they submit stronger offers, forcing others to raise their bids to compete. This upward bidding spiral has two key consequences:

1. Escalating house prices: As bids rise, sellers push their asking prices higher, reinforcing the cycle of inflation.
2. Weakened financial positions: Buyers without access to family support often stretch their budgets with larger mortgages, increasing their long-term financial risk.

This dynamic not only affects individual home seekers but also has broader ramifications for market stability and credit exposure across the banking sector.

Affordability and Inequality Concerns

Home ownership has traditionally been one of the primary vehicles for building wealth in the Netherlands. However, when new entrants depend on parental wealth to secure property, a self-reinforcing gap emerges between those with and without family resources. Key concerns include:

• Growing wealth disparity: Young adults whose families lack the means to contribute remain locked out of home ownership or relegated to less desirable areas.
• Intergenerational equity: As property prices climb, the wealth transfer from parents to children widens the gap between different social strata.

According to ING, the influx of parental funds is turning home ownership into a privilege for the already privileged, undermining the fairness of the Dutch housing market.

Why First-Time Buyers Need Extra Help

Several factors have combined to make the first home purchase so challenging:

• Supply shortage: A persistent shortfall of newbuilds and resale homes has tightened competition.
• Withdrawals by investors: Many buy-to-let investors have sold off properties, temporarily easing supply constraints but driving up demand from first-time buyers.
• Rising mortgage costs: Although interest rates have moderated recently, borrowing remains expensive compared to pre-pandemic levels.
• Higher income thresholds: ING reports that 66% of first-time buyers in 2024 fell into higher income brackets, up from 57% in 2018. Buyers with stronger incomes are more likely to afford large down-payments, further segmenting the market.

These pressures incentivise young buyers to seek any advantage—especially tapping into parental savings or equity in their own homes.

Strategies for First-Time Buyers Without Family Support

Not all buyers can call on family wealth. Fortunately, alternative strategies exist:

1. Step-by-step saving plans: Automate a portion of your monthly income into a dedicated ‘home fund’ to build a substantial down-payment over time.
2. Explore cooperative housing: Some woningcorporaties (social housing associations) offer shared-equity schemes that lower upfront costs for first-time buyers.
3. Consider regional alternatives: Prices in smaller cities or towns are often significantly lower than in Amsterdam, Utrecht, or The Hague.
4. Look for government assistance: If you’re eligible for huurtoeslag (rent allowance) as a renter, you can redirect those savings into your purchase fund once you become an owner.

While these approaches can extend your timeline, they help you avoid overleveraging and preserve financial flexibility.

The Path Forward for a More Inclusive Market

Policymakers and stakeholders are debating measures to level the playing field:

• Limits on gift tax exemptions: The Dutch government could cap the amount parents can transfer tax-free for home purchases.
• Incentives for affordable development: Accelerating approval for social and mid-range housing projects to boost supply.
• Enhanced rental-to-buy schemes: Expanding shared-ownership models to help buyers accumulate equity gradually.

Such reforms aim to ensure that rising home prices and parental wealth transfers do not lock out increasingly large swaths of aspiring home owners.

Conclusion

The growing reliance on parental gifts to secure that crucial first mortgage highlights deep vulnerabilities in the Dutch housing market. While family support can provide immediate relief, it also fuels price inflation and entrenches inequality. Prospective buyers without access to this funding may need to explore alternative strategies or wait longer to save enough for a deposit. Policymakers will need to balance market stability, fairness, and affordability to preserve home ownership as a realistic goal for all.

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