House prices have been booming in almost every country in the world since the start of the corona crisis.

In only three of the forty OECD countries, houses became cheaper in the past year.

Expensive houses are therefore not a purely Dutch problem, but compared to neighboring countries, the Dutch pay themselves blue.

In the meantime, it has almost become a permanent fixture: house prices in the Netherlands are rising the fastest every month in twenty years.

Last month we paid 16.3 percent more for a house, the strongest increase since 2000 according to the Central Bureau of Statistics (CBS).

A house for sale in our country now costs an average of 4 tons.

That is a lot more than in neighboring countries.

Belgians and Germans pay an average of just over 3 tons for a home according to their respective statistical offices.

However, prices there have also risen sharply.

Belgium saw an increase of 19 percent between 2015 and 2019 and a house in Germany became 28 percent more expensive during that period.

In the first quarter of this year, Belgium added 5.7 percent and Germany 8.1 percent.

In the Netherlands, a house became 11.3 percent more expensive in the past quarter.

Increase in house prices in the EU between 2015 and 2019

Source: European Mortgage Federation©

People have a lot of savings due to the corona crisis

The corona crisis plays an important role in this.

The lockdowns and travel restrictions have allowed people to spend their money on few things in the past year, leading to bulging savings accounts.

In June there was a total of 407 billion euros in Dutch savings accounts.

That is about 36 billion euros more than in June 2019, when there was no corona virus yet.

That money eventually has to go somewhere and many people chose to move to larger homes, where there is more room to work comfortably from home.

This suddenly sharp increase in demand is driving up prices in all countries.

Increase in house prices in the EU in the first quarter of 2021

Source: Knight Frank Research©

Hungary leads the way in the European Union

However, if we look at the EU, Hungary has seen the strongest increases.

In the first quarter there was only 1.8 percent, but between 2015 and 2019 house prices in the Eastern European country rose by no less than 85 percent.

The corona crisis has therefore put less upward pressure on prices, but the increase in recent years has mainly been due to family politics in the country.

Married couples can borrow from their bank in Hungary at an interest rate of less than 5 percent, which is well below the market price, and couples who promise to have at least two children receive a financial boost when buying a new one. House.

They can take out a so-called family loan that they only have to pay off for two-thirds, at an attractive interest rate.

For example, the conservative government of Viktor Orbán wants to stimulate the classical family.

This ensures that the middle class in Hungary can spend a lot of money on a house, and that pushes prices up sharply.

The Netherlands has many cheap financing mechanisms

Back to the Netherlands: a home with us became 32 percent more expensive between 2015 and 2019.

This is largely due to the fact that too few houses have been built in our country in recent years.

As a result, the demand quickly exceeds the supply.

"In addition, in the Netherlands almost never houses are built before they have already been sold on paper, so that there is hardly any vacancy and the price therefore has no chance of lowering", said Paul de Vries of the Land Registry.

But there's more to it.

The Dutch can relatively easily make use of cheap financing when buying a house.

For example, there is the so-called mortgage interest deduction, whereby home buyers can deduct the interest and a number of other costs associated with a mortgage from their taxes.

Since this year, the second income in a household also counts for 90 percent in the calculation of a maximum mortgage.

The first income counts in full anyway.

Finally, young people under the age of 35 do not pay transfer tax.

Experts have been calling for this financing to be tackled for some time now.

"If the exemption from the transfer tax and the mortgage interest deduction are abolished, the rise in house prices will be slowed down," ING economist Mirjam Bani told earlier.

De Vries, on the other hand, believes that the lending standards should become stricter, so that people can no longer borrow the full value of a house.