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457 - The housing market in the Netherlands

Windy Vandevyvere and Andreas Zenthöfer, European Commission

The housing market in the Netherlandspdf(737 kB) Choose translations of the previous link 

This paper looks at the policy interventions in the residential housing market in the Netherlands, assesses their impact on the economy, and concludes with possible reforms.

Summary for non-specialistspdf(21 kB)


The Dutch housing market has been shaped by highly interventionist public policies spanning over several decades. Direct and indirect government intervention in the housing market through spatial planning and land policy, regulation and supervision of housing associations, rent policy and financial guarantees, generous mortgage interest deductibility and other explicit or implicit subsidies have led progressively to entrenched structural problems, which have negative consequences for the economy as a whole. Given the relatively rigid supply, price developments have been determined in particular by fiscal incentives and demand factors, under which innovations in mortgage financing have played a particularly important role, so that, compared to other euro area members, the Netherlands has relatively high levels of leveraged housing wealth. We conclude with possible reforms that would increase the efficiency of the Dutch housing market by addressing distortions in a gradual fashion while still achieving social policy objectives.

(European Economy. Economic Papers. 457. June 2012. Brussels. PDF. 31pp. Tab. Graph. Bibliogr. Free.)

KC-AI-12-457-EN-N (online)
ISBN 978-92-79-22978-7 (online)
doi:10.2765/26427 (online)

JEL classification: E6, G21, H2, H31, H6, R3

Economic Papers are written by the staff of the Directorate-General for Economic and Financial Affairs, or by experts working in association with them. The Papers are intended to increase awareness of the technical work being done by staff and to seek comments and suggestions for further analysis. The views expressed are the author’s alone and do not necessarily correspond to those of the European Commission.

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