The housing market in the Netherlands remains unprecedentedly tight. This is evident from the housing market figures for the first quarter of 2021 from the Dutch Association of Real Estate Agents (NVM), with significant price increases, increasing scarcity, and overbids. In this article, we will discuss some of the factors why project developers are looking for cross-border real estate projects.
The average selling price of an existing home rose in the first quarter of 2021 to 385,000 euros. Compared to the first quarter of 2020, this is an increase of almost 15%, an occurrence that has not happened in the last 20 years. Halfway through the first quarter of 2021, approximately 17,500 homes were for sale, 42% less than the previous year. Collectively, this has made it more difficult and expensive for project developers to find and purchase homes.
Moreover, from January 1st, 2021, the government has increased the transfer tax for a home that is not intended as a main residence from 2% to 8%. The increased tax applies to all transactions, except for purchasing a house as the main residence. Increasing the transfer tax makes it less attractive for project developers to buy multiple homes in the Netherlands.
Due to the scarcity of the housing market in the Netherlands and the increased transfer tax, an ever-increasing number of project developers are looking across borders to available real estate properties.
In actuality, the status quo remains the same for the real estate investor. An investor will still receive high returns on investments. It is also very interesting for investors to build an international investment portfolio. International real estate offers the same benefits as domestic real estate, such as a stable return and an excellent opportunity for diversification within the investment portfolio.
Project development at Max Crowdfund
Max Crowdfund is in contact with Dutch project developers who purchase and renovate real estate projects abroad. These projects are offered via the platform, the instrument through which investors can place their investments.
Max Crowdfund has a unique market position because the platform can, in accordance with the AFM, mediate in loan agreements concerning real estate to companies in the Netherlands, Germany, and the United Kingdom. This means that project developers, who reside in these countries, can offer projects via the platform worldwide.
In addition, Max Crowdfund offers bridging loans with an interest of 8% per year. The MCF platform is more affordable than comparable platforms in the Netherlands that charge an interest of 1% per month. The 1% per month amounts to 12% on an annual basis.
Written by: Julia van der Kooij