Archive for the ‘Housing’ Category

Nigel Cassidy in Rotterdam, BBC News

The once-model Dutch economy is “now underwater economically”

Maureen Wachtels is trying to relax by making a Victoria sponge in her small but pristine central Rotterdam flat.

For a few moments, the whole process of sifting, mixing and baking helps take her mind off her personal plight.

Not only has she lost a well-paid and enjoyable job because of a life-threatening illness, she is also one of about a million Dutch people who suddenly find themselves in negative equity.

Maureen needs to move to sheltered accommodation as soon as possible. Yet she has only had one offer for her flat, way short of the 200,000 euros that she paid just two years ago.

But this is not just a story of over-optimistic lenders who tempted the Dutch to pile into property in the mistaken assumption that it would continue to rise in value.

The housing dam has broken. Holland is sitting on some 650bn euros in mortgage loans, with many properties worth 25% less than they were before the financial crisis.

No other EU consumers are as deeply in debt. The bursting of the Netherlands real estate bubble is now on a scale only previously seen in the United States and Spain.

‘We can’t sell’

Worst of all, it is endangering banks and jobs – stalling the longed-for recovery that is starting to emerge in neighbouring north European countries.

And all this in a country that until recently was seen as an exemplary economy – one that was quick to criticise others in Europe for not living within their means. The irony is not lost on Dutch citizens.

Maureen Wachtels in her kitchen in her Rotterdam apartment
Maureen says her flat is now worth much less than she paid for it

What remains one of the most open and competitive countries in the eurozone finds itself busting EU deficit limits and having to rapidly impose painful state austerity measures on its people against the clock.

For Maureen Wachtels, it is a surprising turn of events because she thought she was being frugal.

When she was in the market to buy, she borrowed some 200,000 euros, but was told she could borrow almost 500,000 euros – and many did just that.

“We were all forced to buy because at the time there didn’t seem to be any property to rent. Now we are stuck with houses we can’t sell,” she says.

“I never expected that in just two years my asking price would come down from over 200,000 euros to 179,000.

“All I have is an offer for 153,000 euros which I have sent to the bank – but they have not responded.”

She has advised her children to decline their inheritance on her death – because otherwise they could be stuck with her unexpected debts which will total some 35,000 euros.

Tax breaks

The estate agent handling the sale, Dennis Stellio, principal of Match Makelaars in Rotterdam, says the price falls are a good thing – not least because a return to affordability has revived the previously moribund rental market.

Despite this, he feels desperately sorry for clients like Maureen Wachtels who have been caught up in financial events. Mr Stellio believes the origins of the crisis lie in botched economic policy of the previous government.

For instance, until recently tax breaks for mortgage borrowers in the Netherlands were so generous that they inflated the market to the point where most people could no longer afford to buy.

He suggests the fault lies with politicians looking for votes who failed to act on warnings and correct the state’s unsustainable generosity; the mortgage tax breaks were costing taxpayers an estimated 14bn euros a year.

Finally, the system was changed but by then the market was falling.

“The price drop began in 2008 and it won’t stop. In my opinion prices will keep coming down 2 or 3% a year until they end up around half of what they were,” says Mr Stellio.

“They could fall even more as and when the European Central Bank raises interest rates.”

‘You can’t move’

For some, the Dutch experience provides an economic lesson of the risks for a prosperous economy caught up in a post-bubble crunch when it has ceded control of its monetary policy, interest rates and currency.

One man who has closely followed the Dutch housing market is Maarten van Wijk, an economic specialist for the Algemeen Dagblad newspaper.

“If you have a house worth 150,000 euros, but it has a mortgage of 200,000 this has a large psychological effect. You can’t move, you just have to struggle to pay down the mortgage as fast as possible.

“That is money you can’t spend in the economy. It has also come as a surprise to most people.

“If you went to a dinner party before the crisis and told people you were renting a house, people would probably consider you financially backward.

“It was received wisdom that house prices would always go up.”

Escape route

So far forced sales are relatively low – estimated at only 3,000 or so since the crisis began.

Dutch estate agent Dennis Stellio
Over-generous tax breaks distorted the market, says estate agent Dennis Stellio

Banks are offering various relief measures to try and keep people in their homes – not least because the lenders themselves want to avoid writing down their home loans.

One possible future escape route for some stressed homebuyers might be tapping into their accrued personal pension funds – if they have any.

It is an idea under active consideration in a country now exploring any possible avenue to escape a debt crisis of its own making.

Original article found here.


Hurricane Sandy, which battered the Northeast and flooded large parts of New York City, costing at least $34 billion and taking more than 100 lives, may have been a climatic anomaly. But it may also suggest a very real future of rising sea levels and coastal flooding triggered by climate change. If that is the case, no country offers a better master class in flood protection than the Netherlands, which spends $1.3 billion a year on flood control. The country’s favorite patriotic slogan—“God created the world but the Dutch created the Netherlands”—reflects the fact that much of the low-lying country should be waterlogged. The reason it’s not is a centuries-old network of dikes, floodgates, sluices, and canals, regulated by regional water control boards, which have reclaimed land, protected against storm surges, and ensured that water levels remain stable.

That’s why New York mayor Michael Bloomberg asked for Dutch advice in 2011 after Hurricane Irene, turning to Professor Jeroen Aerts of the Free University of Amsterdam. Aerts’s analysis of how to protect New York City and the Eastern Seaboard is due later this year, but if it follows the Dutch model, it will likely emphasize a form of hydraulic engineering that replicates the Dutch Delta Works projects, a massive system of storm surge barriers and levees. Whether there is enough state or federal money for that kind of infrastructure is the big unknown. If not, some coastal Americans may consider turning to buoyant, foundationless homes like the 75 floating houses of IJburg that bob in Amsterdam’s harbor.

Original Conde Nast Traveler article found here

Original BBC News article found here

By Anna HolliganBBC News, The Netherlands

Renovations in Amsterdam apartments – nicknamed “halal homes” in the press – have sparked a political row in the Netherlands.

About 180 apartments in Amsterdam have been given special makeovers which suit the wishes of Muslim residents. Features include individual taps that can be used for ritual cleansing before prayers and sliding doors to keep men and women apart.

Apartments in Bos and Lommer area
The renovated apartments look quite typical from the outside

 Some right-wing politicians have been stirring up public opposition, warning that anyone asking for such modifications should “leave for Mecca”.

From the outside, the apartments look no different from other social housing blocks in the residential area of Bos and Lommer, in the less opulent western reaches of the capital.

Aynur Yildrim gives a tour of her home with the enthusiasm of an inspired estate agent. In the bathroom she bends to reveal the lowered water point – a modification that, in some variation, might equally exist in non-religious homes. But it is the perceived religious aspect of these changes that has made them so controversial.

And it is in the tidy kitchen that the distinction is most striking, as Ms Yildrim shows off the sliding doors.

“I wanted a closed kitchen, in order to be able to close the kitchen off now and then for a bit more privacy. Sometimes we like to be separated, the women on one side and the men on the other.”

Wim de Waard of the housing association Eigen Haard insisted that the changes were “absolutely not religiously inspired – they are just practical adaptations”. The adaptations followed consultations with local residents, including Muslim groups.

Mr de Waard stressed that apartments were not reserved for Muslims – homes were assigned on the basis of rank on the waiting list, size of household and income.

Aynur Yildrim in her apartment in Amsterdam
Aynur Yildrim is enthusiastic about the adaptations which fit in with Muslim tradition

Wilders outraged

For many Dutch people, living in a historically tolerant and liberal country, the idea of separating men and women has led to some criticism that these buildings are effectively condoning some kind of gender inequality.

The controversial anti-Islam politician Geert Wilders accused the Dutch authorities of subsidising a “medieval gender apartheid”.

He has publicly prophesied about an impending “ghettoisation” of Dutch neighbourhoods – not unusually strong words from a man who once appeared in court for his strident rhetoric. Mr Wilders was cleared of inciting religious hatred two years ago.

After a poor performance in recent parliamentary elections, Mr Wilders may be angling to woo immigration-conscious right-wing voters again with his strong, headline-grabbing statements. Recent opinion polls suggest that if there were to be an election tomorrow, his Freedom Party (PVV) would win.

A Dutch property developer and PVV supporter said he was “shocked” by the “halal homes” concept.

“It’s a ridiculous idea, I thought it was a joke,” he complained.

“It turns into reality. The rules of the Koran are discrimination, it is stimulating discrimination. It’s taking us back to medieval times.”

“These immigrants are from lower social classes, they’re not educated, they’re bringing those values to our Dutch society – the opposite should happen, they should adapt to our modern and free values.

We should teach them to integrate. This is backwards. What if it were on buses? If we were to separate men and women on buses it would be like discrimination again, here in the Netherlands. It’s crazy. I can’t believe it. It frightens me.”

Using tax revenueBut many residents in the area seem to accept that what their neighbours do in the privacy of their own homes is entirely up to them.

Geert Wilders - file pic
Geert Wilders has long campaigned against Muslim influence in Dutch society

Tess Duijghuisen lives in the same block and said: “A lot of new people arrived here lately, a lot of young people like me, so trust me, there’s no problem of ghettoisation.

“And there are a lot of exchanges between people from all nationalities, which makes life much nicer here.”

On internet forums, some users have made light of the renovations, with comments such as, “I believe in the power of disco, please can I have a disco ball built into my apartment?”

When I asked Dutch followers on Twitter why the opposition, they told me “it’s wrong that inequality should be subsidised by tax money” and that another country’s traditions “may be offensive to others”.

It is a debate over the public versus private spaces. When the public purse is used to part-fund modifications, which many see as the religious antithesis of traditional Dutch society, conflict emerges.

Public funding is actually in the form of a guarantee, the housing association says. Yet it is still perceived as a subsidy.

The housing association says the complex is completely mixed, that the homes have been renovated to improve their “rentability” and that it is just trying to keep everyone happy. Many would argue that that is a tough ambition to fulfil – whether in religion, politics or our private lives.

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Original BBC article found here

By Katia MoskvitchTechnology reporter, BBC News

Floating house, Colombia
A floating house in Colombia, modelled on a Dutch design
The recent flooding across the UK has seen hundreds of householders desperately trying to prevent water from entering their houses.

Most use the centuries-old approach of piling heavy sandbags at their doors and windows.

But what if your house was buoyant – rising at the same level as the surrounding water?

Earlier this year, Baca Architects was granted permission to build Britain’s first amphibious house by the banks of the River Thames in Buckinghamshire – one that rests on land, but in the event of a flood rises with the water.

The Environment Agency is interested in the idea of such floating homes, says the agency’s flood risk engineer Tony Andryszewski who often works at a flood test centre, set up to investigate new technologies for flood prevention and control.

The agency is keen on seeing how other countries approach the problem, he says, especially in the Netherlands.

The Dutch are widely acknowledged as having the best flood management technologies in the world.

Floating houses, Canada
Floating houses in British Columbia, Canada, are designed differently from the ones in Holland


Even the flood forecasting software used by the Environment Agency, Delft-FEWS, has been developed by the Dutch.


Such know-how is not surprising – much of the Netherlands’ land mass is below sea level, and even the country’s name reflects its low-lying topography,

Since the 12th Century people have been draining delta swamps and creating artificial dry land – polders – at first using pumps powered by windmills.

Currently, there are about 3,500 low-lying polders enclosed by dykes in the Netherlands. They easily collect water from rain, rivers and the sea, and are constantly being pumped to keep nearby communities dry.

“The Dutch have built dykes for over 1,000 years,” says Jos Maccabiani from Flood Control 2015, a Dutch government programme charged with developing better information systems for managing floods.

“Since the last major flood in 1953, in which more than 1,800 people died, this system has been upgraded to very high standards.”

According to computer simulations, today’s defences in the Netherlands are supposed to withstand the kind of flood so severe that it would occur only once in 10,000 years, he explains.

There are dams all around the country, guarding all main river estuaries and sea inlets.

The Netherlands
Many Dutch live below sea level so flood management technology is vital


“Nevertheless, with the ever-increasing urbanisation of our polders and flood plains, spatial planning is increasingly combined with flood resilience,” adds Mr Maccabiani.

“There are projects under way where urban revitalisation of a city is combined with the widening of the river bed, lowering the peak water levels, and others that look into flood-proofing the country’s highway infrastructure.”

Ready to float?One Dutch technology that the UK is observing keenly is the “smart levee”, designed in the Netherlands as part of an EU research project, UrbanFlood.

Amphibious house designAn amphibious house rises with the water level – and sinks to its original position when the flood subsides

Sensors are put inside flood embankments, as an early online warning system and for real-time emergency management. The technology constantly monitors the condition of the levee, and sends a warning when it is weakening.

Another innovation that Britain has already started to adopt is movable river barriers – installed in the ground, they rise with the water.

Dutch floating houses are also on the Environment Agency’s radar, says Mr Andryszewski.

Homes on stilts are common in flood-prone countries such as Thailand, Burma and India. Floating houses of different designs exist in a few places too, namely in Germany, Canada, the US, and even on Taggs Island in the UK, where some 60 homes are attached to piles driven into the riverbed of the Thames.

But creating an amphibious home – placing a house on a platform that makes the house float in case of a flood – has only recently been looked at in the Netherlands.

In 2005, Dutch firm Dura Vermeer built several buoyant houses in the village of Maasbommel, along the Maas River, about 60 miles (100km) from Amsterdam.

House on stilts, MyanmarHouses on stilts have existed for centuries in flood-prone areas – like this one at Inle Lake, Burma

They rise as the water rises, keeping occupants and their possessions dry. When the floods subside, the houses sink to their original position.

The houses float on hollow pontoons made of concrete and timber. All pipes and ducts for water, gas, electricity, and sewage disposal are flexible and keep functioning even when a house rises several metres.

Unlike boats, the houses can’t drift away, as they are kept in place by sturdy posts set deep into the ground.

Currently, Dutch architectural company Waterstudio is planning to build an entire apartment complex on water, which it says could accommodate hundreds of people.

‘Sandless’ sandbags

Even if the UK doesn’t build floating houses any time soon, there are some innovations that could at least replace the heavy sandbags.

UK entrepreneur Richard Bailey designed lightweight bags that expand on contact with water – and also absorb it.

“It was first designed for the Ministry of Defence,” says Mr Bailey, explaining that his company FloodSax was asked to create an easily portable alternative to sandbags for the army’s bomb disposal unit.

Floods, UKTraditional heavy sandbags are still common, despite existing alternatives


“We put the bag into a barrage unit, the water comes in, gets soaked into the bag, the bag expands, blocking the water at the door.

“Or unfortunately when someone has been flooded, you can put it down in the house, soak up the water and the mud as well, so that you can get back into your house a little quicker.”

There are other firms offering similar technology, such as Thailand-based Nanotec or another UK company, HydroSack, and FloodSax’s bags are now being used in many countries across the world.

“Unfortunately though, they are still not as popular as the traditional sandbags, because not everyone is aware of the innovation,” says Mr Bailey.

But Mr Andryszewski is confident that the UK will continue to use more and more innovative technology – there are already numerous places that use watertight submarine-type doors, he says, and the flood test centre is busy experimenting with other original approaches to keep the land – and homes – as dry as possible.

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Original Reuters article found here

Wed Nov 7, 2012 10:11am EST


Nov 7 - The Dutch government's proposed austerity measures could have a
greater negative impact on house prices than on the performance of existing
mortgages, Fitch Ratings says.

Slow implementation, the focus on the highest earners and a partially offsetting
reduction in tax rates, mean we do not expect the much-anticipated reduction in
mortgage tax deductibility to have a significant effect on default rates in a
near future. The rate will fall to 38% from 52%, though phased in at just 0.5% a
year, and only the highest earners will be affected at first. The initial impact
will be small - we calculate the loss of income for an individual in the highest
tax bracket, making interest payments of EUR15,000, will be just EUR75 in year
one, gradually rising to EUR2,100 in year 28.

The proposal to link health-care premiums to personal income from 2014 would
have a greater impact, raising costs to EUR5,650 from EUR1,269 for those earning
EUR70,000 or more. However, as with the changes to mortgage tax relief, the
biggest burden would arguably fall on those best able to bear it (health-care
premiums will fall for those earning less than EUR29,000) and may also be partly
offset by the cut in the top tax rate.

In contrast, proposed cuts in unemployment benefits would - by definition - hit
borrowers who might be less able to continue making mortgage repayments. From
July 2014, unemployment benefits will be paid for a maximum of two years, down
from three currently. For the first year, the amount received will be 70% of a
claimant's last-earned income. It will then fall to the same level as the
minimum wage.

This could lead to an increase in default rates after around three years,
although the impact may be tempered by an economic recovery between now and
implementation. We forecast real GDP increases of 0.7% and 1.5% in 2013 and 2014
respectively, versus a 0.7% contraction this year. Dutch unemployment has
remained low by European standards, and we currently expect it to peak in 2013,
at 6.2%.

Overall, however, the changes could add to the current weakness in the Dutch
housing market. Potential buyers may see them as another reason to avoid
entering the market, alongside economic uncertainty and the desire to wait until
prices have bottomed out. In our latest criteria revision in June we increased
our base case default rate to reflect a deteriorating macroeconomic situation
and possible austerity measures. The emergence of these measures, combined with
the sharper-than-expected falls in house prices over the summer, mean Fitch is
currently assessing its Dutch house price expectations and is likely to review
them in the near future (we already expect a steady house price decline into

We plan to comment in more detail on the broader potential ramifications of the
proposals on the Dutch mortgage and housing markets at a later date. It is also
a topic at our upcoming "European RMBS: Looking Beyond the Ratings" events in
Amsterdam tomorrow and London 20 November. Full details are available at

The new coalition government announced the measures last week as part of its
effort to make around EUR16bn of budget savings.

The above article originally appeared as a post on the Fitch Wire credit market
commentary page. The original article can be accessed at
All opinions expressed are those of Fitch Ratings.