Almost €100,000 of income per year is needed to purchase the average home

Recent research shows in 2023, the average sale price of a home in the Netherlands was €452,000. To get a mortgage of this value, an annual income of €95,000 is needed. This was calculated by market researcher Calcasa, taking into account the new lending standards that have been in force since the beginning of this year. However, the study identifies major differences between different types of homes and between municipalities.

The new lending standards for mortgages are beneficial for homeowners who want to make their homes more sustainable, says Calcasa. There are additional mortgage options for sustainability measures, up to an amount of €50,000, depending on the energy label of the home. In addition, since the beginning of this year, buyers aged 18 to 35 have been exempt from transfer tax for homes up to €510,000.

Based on these standards, Calcasa has calculated the gross annual income required to purchase an average home in the Netherlands. The market researcher assumed a mortgage interest rate of 3.75% without National Mortgage Guarantee (NHG) and 3.25% with NHG. The NHG offers a safety net when house prices fall and ensures that buyers can get a lower interest rate.Furthermore, the study assumes a family with two earners without student debt, a home with energy label E, F, or G, and without a deposit of their own money. Households with an annual income of just over €80,000 can finance an apartment or row house, Calcasa says. A corner house requires €86,000 in income, and a semi-detached house requires €95,000. For a detached house, two-income households must earn the most, namely €124,000 annually.

The average income in the Netherlands in 2023 was €44,000. This means that most people will not be able to get a mortgage for a house of the average sale price. Owning a home seems out of reach for most Dutch people.

The municipalities of Bloemendaal, Laren and Blaricum top the list of least affordable homes. There, the average sale price of a home is over €1 million. To finance this, an annual income of more than €200,000 is required. Amsterdam is the most expensive of the four major cities: here, an annual income of €120,000 is required to finance the average home. In four other large municipalities you also have to earn at least €100,000: Haarlem, Haarlemmermeer, Utrecht and Amersfoort.

It’s worth looking elsewhere: for a home in Pekela in north-east Groningen, or Heerlen or Kerkrade in Limburg, a gross annual income of around €60,000 is sufficient. Of the twenty largest cities, Enschede is the cheapest. An income of €71,000 is enough to buy an average house in this city – still 61 percent more than an average income.

Calcasa has not calculated how much people had to earn in 2022 for an average home, says director Tijs Pellemans. The average house price is now €11,000 lower and the lending standards have improved somewhat, but on the other hand the mortgage interest rate is slightly higher. According to Pellemans, this means that the affordability of houses this year is ‘worse than ever’: ‘Last year we calculated that with €200,000 you could buy approximately 3 percent of the number of owner-occupied homes. Now you can buy just under 3 percent. The importance of saving up your own money has become very important.’

After all, it’s not possible to buy a home without investing your savings. Since 2018, the mortgage can be no more than 100% of the sale price of the house. This means that the costs of buying a house must be paid from other funds. In fact, there are many associated costs: the fee of the notary, the estate agent and the mortgage advisor, transfer tax (2 percent of the purchase value), and the cost of a valuation and structural inspection. And of course there are the costs for any renovations you want to do in your new house. So, in fact you need to earn even more than the amounts cited by Calcasa, if you want to make your new home your castle!

Written by Saskia Roselaar