Stricter Rules for Investors in Groningen Amid Rising Housing Costs Across the Netherlands
Groningen proposes raising purchase protection limits to keep homes accessible for residents, as housing prices and rents across the Netherlands are set to rise sharply in 2025.
In Groningen, the municipal council factions of PvdA, GroenLinks, and SP are advocating for stricter rules to curb investor influence on the housing market. Their proposal includes increasing the purchase protection limit from €355,000 to €450,000, aligning it with the National Mortgage Guarantee (NHG) limit set for 2025. This would ensure that more owner-occupied homes are reserved for Groningen residents, preventing them from being snapped up by investors to be rented out for profit.
The initiative comes in response to Groningen's housing market crisis, one of the tightest in the Netherlands. "Homes are for living in, not for making a profit," says council member Rico Tjepkema (PvdA). "With a higher purchase protection limit, we can keep homes affordable for ordinary Groningen residents instead of filling the pockets of landlords." The parties also call for extending these measures to the former municipality of Ten Boer, where housing pressure has significantly increased due to demand spilling over from the city.
In the context of a National Housing Crisis
The housing challenges in Groningen reflect broader issues across the Netherlands. Housing prices nationwide are set to rise sharply in 2025, with the average cost of a home expected to increase by 7.5%, reaching approximately €520,000. This surge is driven by increasing wages, persistent housing shortages, and lower mortgage interest rates. The Dutch Central Bank (DNB) notes that only 36% of households earn the minimum €106,000 gross annual income needed to afford such a house.
Rental prices are also on the rise. Private sector rents could increase by up to 4.1%, while mid-range rentals might see hikes as high as 7.7%. For tenants in social housing, the maximum rent increase will be 5%. For example, a basic rent of €1,000 in the mid-range sector could rise to €1,077 monthly. These increases are tied to higher collective labour agreement wages and inflation.
While the Dutch government aims to build 100,000 homes annually, experts argue that this target may be insufficient to alleviate the housing crisis. Suggestions include phasing out mortgage tax relief to reduce demand in the buyer's market and improving the rental market to provide a more sustainable alternative for housing seekers.