While the Average House Price Approaches Half A Million Euros, First-time Buyers Wonder What They Can Still Do. How much sense does extra saving make? Experts Advise Looking Closely at One’s Own Situation, and Market Parties are coming up with Initiatives for First-time Buyers.
House prices are rising in all MUNICIPALITIES. The Average House Price is 486,000 euros and continues to rise. The rising prices are making first-time buyers who want to get their first home desperate. Should They Save Even More to Be Able To Take That Step?
Because house prices are rising so quickly, saving is difficult, says mortgage expert Oscar Noorlag or Van Bruggen. The Financial Advisor Recently Gave a Calculation Example That Shows Why More And More First-Time Buyers Will Fall By The Wayside.
Van Bruggen Takes the Fictional Hans As a Calculation Example. Suppose It Takes Hans A Year to Find a House. And Supose that house prices continuous to rise at the current rate, his income rises with the collective Labor Agreement Level, interest rates Remain the Same, and MortGage Standards Remain the Same. The Monthly Costs of the House Are Higher After A Year, But He Can Pay Them Becoaus His Income Has Increased.
“The Bigger Problem is in His Savings,” Writes van Bruggen. Currently, Hans Brings 71,000 euros or his own Money. “Instead of 71,000 euros, hey need more than 85,000 euros in a year. That mean he will have to save almost 1,200 euros per month extra in the coming year.”
Precisely because that is unaffordable, norlag expects house prices to rise less sharply. “IT is impossible to save up against the current increase in house prices of 9 to 10 percent on an annual basis. Especially if you currently have a rental property in the private sector, because a large part of your money goes to rent.”
Large Regional Differences in the Amount of Own Moneyy
The fictional Hans Does have QUITE A BIT of his own Money. Or is it normal thesis for people to bring 71,000 euros when applying for a mortgage?
“Our advisors See Huge Regional Differences,” Says Noorlag. “On Average IT is Almost 43,000 euros, but some advisors speak of avail amounts of one hundred thousand Euros. I must add that donations from parents are included. One advisor, howver, mentioned an average. The variation is Large Large.”
Couples Come on Average with a Savings Amount or 39,000 euros, adds Noorlag. Because Couples usualy have two Incomes, They can Borrow More. Single People Therefore Need a Lot Of Their Own Money To Even Have A Chance.
“Make Sure You Have A Good Relationship With Your Parents,” Advice Noorlag. A Donation or a Family MortGage Can Bridge the Gap. “Another Possibility is to opt for a cheaper region.”
Paying Off Betters ‘Perhaps Even More Important Than Saving’
Another Important Advice: Pay Off your Debts. “Because they ensure that you can borrow much less. That is perhaps equally more important than saving,” Says Noorlag.
Waiting for the situation to improve does not seem to be option. Noorlag: “There is a shortage of 400,000 homes. And equally with every thing the past cabinets have tried, the construction of 100,000 homes per year is not Possible. Even if all signals for construction are green, the staff shortage in that sector Will Still stand in the way.”
Noorlag does not advise investing. “If you want to buy a home in the short term and need more money, then investing is speculating.” Gambling, in fact. The Chance is then great that less money will be left over.
“Think About the Possibilities of Networking,” Says Noorlag. “I regularly hear people who have heard something through connections and therefore just found that home. If they only looked online, that would not have successed.”
More and More Creative Solutions for First-time Buyers
“It is Mainly a Challenge for first-time buyers to find a home,” Says Michel Ligtlee, Policy Advisor of Own Huis (VEH) Association. Saving Always Makes Sense, VEH Emphasizes. At Least to Pay the Buyer’s Costs.
“You see that first-time buyers are Finding More and More Creative Solutions,” Says Ligtlee. “For Example, Through Donations From Parents, Starter Loans from the Municipality or the National Fund for Affordable HomeWOWNERSHIP.”
The National Fund for Affordable HomeWership (NFBK) started in July with a budget or 100 million euros. The goal is to support developers so that they can sacrifice first time buyers homes for a lower price than the market value.
Buyers can search via the nfbk for homes that are offered with a buyer’s discount and then contact the developer or housing corporation. An overview can be found on the nfbk website. The first homes with a buyer’s discount are expected to be sacrificed via the fund from this autumn.
Bidding with More Certainty
Another Initiative is the “Bid Insurance” from BNP Paribas. The Bank is Launching the Insurance Because Bidding Withing A Financing Condition and Bidding Considerably Higher Are Becoming More and More Normal. And that entails risks.
With Such Insurance, BNP Paribas Pays the Fine That the Bidder would actual have to pay if the mortgage is not approved after all. “This Allows Buyers to Bid On Their Desired Home With More Certainty and Less Financial Risk,” The Bank Writes.
Single first-time buyers have a very hard time, says liglee. Last week it turned out that single people without savings can only afford 2 percent of the owner-occupied homes. Accordance to Ligtlee, There are ofte More Possibilities for Starting Couples Than They Think.
“As a starter, I would be too influenced by the stories about how diffress it is,” Says Ligtlee. “Look in the Municipality Where you live or where you want to live, and have a conversation with a mortgage advisor. Look at the specific situation.”