Nadezhda Zorina, the project director of The BIG Estate in Russia, told the ee24.com portal what the image of the Russian buyer of real estate in the Netherlands, why foreigners get a mortgage difficulty and which myths are dispelled in the process of making a deal.
Russians - not Russians
- What is the Russian buyer in the Netherlands?
- It is predominantly a man 35-45 years old, with an average income, living in Moscow or St. Petersburg. Generally, the purpose of buying real estate in Netherlands for the average buyer is getting a good income from the subsequent lease or purchase the second home for their children, who are planning to study in Dutch universities.
- What are the most frequently asked questions from him?
- Among the most popular FAQs - the rate of return of the object, the cost of housing maintenance, the amount of commission to participants in the transaction.
- What misconceptions and myths you need to dispel, dealing with Russian buyers?
- Perhaps the most common misconception is the possibility to obtain a residence permit immediately after the purchase. In Netherlands, as in most countries of eurozone, home ownership does not qualify for a residence permit, but is only an advantage, which in the future can accelerate and facilitate the process of becoming a resident. The second most popular misconception is based on the desire to buy a good house for minimum money. Here it is necessary to adequately assess their dreams and opportunities: no need to rush on the first available property on the basis of that budget that you have at a given time. We will never advise a client to get involved in this kind of a dubious deal and orient how much more do you need to save to buy really good object.
- What accommodation are Russians looking for?
- I'd rather not share the customers by nationality. In principle, the criteria are the same: a big city or the suburbs, good infrastructure, high-quality furnish.
- It is believed that the most active players in the Dutch market are the British and the Germans. And where are the Russians?
- Last year was indicative for our company: the Russians are interested in the Netherlands and are willing to invest all available funds in this country. In my opinion, this is not surprising: Netherlands are open for business and life, the country has loyal views on foreigners. 80% of the population speaks English, great number of foreign companies offices works here, 12 of the 13 universities are included in the hundred best universities of the world.
Accommodation for families and students
- What regions does your company work in? Which facilities should the buyer pay attention to?
- Due to the fact that we have access to the database of objects across the country, our experts can find the property even in the smallest towns. However, as a rule, the highest number of transactions fell to the four largest cities - Amsterdam, Rotterdam, The Hague and Utrecht. Here the most attractive conditions for investors are concentrated. A constant interest of the buyers are at campuses - Tilburg, Leiden, Groningen.
- What is typical for the regions you work in? Do they have any advantages for investors?
- Certainly they do, because they are the most popular and populous cities of the country. The most important advantage - is an opportunity to take the purchased property for rent by 8-12% per year, and it's not just about living, but also about commercial real estate.
- What are the risks in buying a home in Holland?
- Since the whole process of buying real estate in the Netherlands takes place in the presence of a notary, the risks are minimized. The only point that is necessary to pay attention to is the state of the house. Low price, as a rule, says that in the future you will have to pay a decent amount for repairs. But we always like to accentuate the buyer's attention on such "pitfalls".
- It is known that recently there was a serious decline in prices of secondary property. Which is now the minimum value of housing in the Netherlands?
- Yes, the Dutch real estate really fell, but not for long. Next year, a gradual rise in prices will begin and the market will return to its original state. Now you can manage to buy a property with €120,000 in your pocket. Of course, we are talking about the most beneficial ways.
- And what is the whole situation with the prices? What are the main trends in the market?
The most stable situation is observed in the "big four": Amsterdam, The Hague, Rotterdam, Utrecht. The most expensive housing is in Amsterdam, where the average cost of a one-room apartment in a good neighborhood is €130,000, two-bedroom - €150,000-175,000, three-room - from €180,000. In six provincial areas (Zuidwest Friesland, Waterland, Lelystad, Elst, Roermond and Zeeuws Vlaanderen) a gradual rise in prices has begun and averaged 1.3%. In the rest of the administrative centers prices are still in the negative balance.
- UNICEF recently admitted Holland as the most favorable country for children. How often does investor carry his family here after buying property in Netherlands. Is this possible under Dutch law?
- As I mentioned earlier, Netherlands is open to foreign nationals, it is the country where everyone can feel comfortable. Among our clients there were about three precedents when after buying a property the family moved to permanent residence in Netherlands. According to the law of that country, if one family member has received a residence permit, the rest can get it too, by an easy reunification process.
- And as for the residence permit, how difficult is it to get a residence permit for a Russian citizen or another foreigner? Does the purchase of the property affect this?
- Ownership of real estate in the Netherlands, unfortunately, does not entitle a foreigner to obtain resident status (with the exception of the island of Aruba in the Caribbean). As the most common ways of obtaining a residence permit is to buy a ready base or settle a new business in the country. This procedure is fairly standard and takes about 3-4 months.
Taxes, charges, mortgages
- What associated costs should be calculated when you're planning to purchase real estate in Netherlands?
- Certainly it is a tax on real estate, which is 2% for the secondary market, for the primary - it is equal to zero. Then the cost of the assessment of real property - 0.2%, a preliminary contract - 0.3%, the signing of the Act - 0.3%, property insurance - 0.16%. And, in fact, participants of the transaction fees: notary will cost 0.7-1.5%, real estate agents - 1.5-2.2%. Total maximum mark-up on the initial price of the object will be 6.6% (in case of secondary market).
- How long the home buying process in Netherlands usually lasts?
Buying process takes approximately 6-8 weeks and involves several stages: site selection, the signing of the preliminary sales contract and a deposit of 10% of the value of the object, check the technical and legal status of the object, the signing of the Act (the Contract), the registration in the Land registry commission to ensure that all participants in the transaction and payment of applicable taxes and fees.
- The beginning of the year brought the news about the intentions of the authorities to create a special mortgage bank to stimulate the market. What is the current situation with the mortgage lending? Can a foreigner expect to receive a loan?
- The system of mortgage lending in Netherlands suggests the possibility of issuing a loan for an alien. But the overall % of such transactions is quite low. The reason is that the Dutch banks give preference to those who have the working citizen status in the country, thus ensuring no problems with the monthly repayment of the loan. And that, as a rule, fully-fledged citizens of the country or foreigners with a residence permit.
- What amount one will have to spend on the maintenance of their own homes in Netherlands?
- In Netherlands, as in many countries, the main items of expenditure for the maintenance of property are real estate taxes and utility payments. Annual property tax is 0.3% of the property value. The homeowners insurance has the rate of 0.16%. Principal payments on utility bills consist of the following items: electricity, water, gas, garbage disposal. Their amount depends on consumption, but on average, you can focus on the amount of €1,300 to €2,000 a year.
- Is it worth living in Netherlands? How much on average would one have to spend a month on food, transport and other processes necessary for life?
- To live a normal life in Netherlands, you need to have a monthly income just above the average Russian salary. The minimum necessary for the normal one person food and various small expenses (transport, etc.) throughout the day is €35-40, ie about €1,000 a month.
Text: Ivan Ulitin, ee24.com