"Coalition agreement of Dutch Government is not a real market reform”
1 Jun 2012
Dirk Brounen, Professor of Real Estate Economics at TiasNimbas Business School, commented in an interview in Dutch real estate magazine Vastgoedmarkt on the real estate plans in the new Dutch coalition agreement (Kunduz agreement).
"The first home buyer is taking most of the pain now, whereas it should actually be divided amongst the wealthy property owners. In addition, the rental market should really be liberalised so first home buyers have access to the middle segment as well", says professor Brounen.
The current agreement states that mortgage holders are only entitled to deduction of mortgage interest if they have closed a level payment mortgage. This means that from the first day the full mortgage amount must be repaid within a period of thirty years. Experts are convinced that this especially weakens the position of first home buyers. They now have to pay interest and repay redemption, which will increase their monthly payments substantially from 15 percent in the first year to 59 percent at the end of the mortgage term.
Professor Brounen concludes: "I am pleasantly surprised that after twenty years of overdue maintenance, politics have finally taken a step. But, at best this is a small reform and basically just a costs saving. First home buyers are disproportionately affected, while from an economy point of view it would be much more logical to use the overvalue of homeowners."
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. Dirk Brounen, Professor of Real Estate Economics Programme Finder
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