Deemed a trendy city, home to a thriving economy, beloved by tourists and plenty of industry, its housing market is starting to experience a bit stressed. “Rates here began to take off and in the coming years were growing at yearly rates of more than 15%, after the housing crisis bottomed out,” said an academic who grew up there.
It’s not New York, nor San Francisco, nor even Texas or Austin.
Klaas Knot, hometown boy from the Netherlands writes, “The same story can be told about other big cities in the Netherlands”. He further added that more recently the rest of the nation has followed this trend, although at a slower pace, which means that rates of houses are now increasing everywhere.
Knot is a resident of Amsterdam as well as president of the Dutch central bank, De Nederlandsche Bank which last summer organized an international seminar on the twin challenges faced by the developed cities of the world about falling housing supply and increasing housing prices.
Knot and numerous co-authors write that cities are becoming more and more popular throughout the world which is leading to a surge in demand for metropolitan housing. This is so because they “have become the monetary powerhouses” of their nations.
The households with middle income all across the world are struggling to afford house, whereas urban worth growth leads that of the rest of the nation. The author of “Hot Property” writes, ‘as the rates of houses in major cities are increasing, the housing market in the regions nearby these cities is now gaining strong momentum too’.
In Australia, for example, households are becoming more leveraged, even as shareholders are gradually more piling into the market.
Central bankers cannot do much for residential builders who want fatter margins and about local zoning laws. They can only help raise or reduce demand, whether through interest rates or lending rules.