A massive 1.8 million Dutch households would prefer to switch their rental home for an owner-occupied home or the other way around. That is 22 percent of all households in the Netherlands, Financieele Dagblad reports based on a study by De Nederlandsche Bank (DNB). The Dutch central bank spoke of a fundamental mismatch in the housing market.
The DNB researchers surveyed over 2,400 people about their intrinsic preference – would they rather be renting or buying if there were no cost differences between the two? 56 percent of respondents would prefer an owner-occupied home, and 21 percent a rental. The rest had no preference.
14 percent of homeowners would switch to a rental if the costs were equal. These are mainly older homeowners. Among social housing tenants, 31 percent would prefer to buy. As would 49 percent of private sector tenants. Tenants under the age of 45, in particular, would prefer to buy.
While the researchers told respondents to pretend costs played no role, they believe that the fact that buying is cheaper than renting played a role in private sector tenants’ wish to own a home. And a lack of finances played a role in social tenants not wanting to buy. Other reasons for buying instead of renting were not being dependent on a landlord and being free to adapt their home.
Cost considerations also played a role in homeowners not switching to rentals, according to the DNB. “Tax policy currently makes it unattractive for the elderly to sell their house and put that money in an investment account. Then their assets will be taxed more heavily,” said DNB researcher Dorinth van Dijk. Those who would switch their owner-occupied home for a rental cited flexibility and not worrying about maintenance as the major advantages.
Younger people have a stronger preference for purchasing a home and are relatively often willing to pay more for an owner-occupied home. People in urban areas are more enthusiastic about renting. And men and higher-educated people more often prefer to buy.
The DNB recommended responding to these preferences in new construction by building sufficient rental apartments for senior citizens and owner-occupied homes for young first-time buyers and families. The government could also consider reducing the fiscal advantages of homeowning. “When senior citizens move, a train starts moving. They leave behind an owner-occupied home which can accommodate a young family, for example,” DNB researcher Maarten van Rooij said.