According to the most recent figures from Statistics Netherlands, at the start of 2014 1.5 million households in the Netherlands had an own home that was worth less than the outstanding fiscal mortgage on it. This is around the same number as in 2013, which would seem to indicate that the rising trend in the share of own homes with negative equity has come to a halt. Negative equity occurs most frequently in the province Flevoland.
One-third of homeowners have negative equity
On 1 January 2014, 4.3 million households in the Netherlands owned the home they lived in. For one-third of these homeowners, the value of the home was lower than the fiscal mortgage debt, which means the homeowner had negative equity. This is mainly the case for households who bought a house shortly before the financial crisis in 2008, whose house value has dropped sharply since then. Around one in six homeowners did not have an outstanding mortgage at the beginning of 2014.
The fiscal mortgage debt does not take into account balances of endowment and investment-based mortgages, as Statistics Netherlands cannot measure these in its present survey; a study is currently being done to estimate these amounts.
Households with fiscal mortgage debt compared with value of own home, 1 January
Fewer homes of older homeowners under water
Seventy percent of homeowners in the age group younger than 45 years had negative equity. Many homeowners in this age group bought their house just before the crisis and have not yet repaid much on their mortgage. In the group of first-time buyers aged between 25 and 30 years, 80 percent have homes with a value lower than their outstanding mortgage.
Negative equity is much less frequent among older households. At the beginning of 2014, 45 percent of homeowners aged over 65 no longer had an outstanding mortgage, and only 4 percent had negative equity on their home. This is in line with the finding that Statistics Netherlands published earlier this year: the highest levels of household wealth are found among over-65s households.
Households with negative equity on their home by age of main earner, 1 January
Flevoland hit hardest
The province Flevoland has by far the highest percentage of households with negative equity. Relatively many younger households with recent mortgages live in this province. Negative equity occurs least frequently among homeowners in North Brabant, Friesland and Zeeland. Nearly three out of ten own homes in these provinces have a value below their outstanding mortgage.
Households with negative equity on their home by province, 1 January