Capital accumulation via homeownership: the case of the Netherlands

In this contribution, the possibilities of capital accumulation via homeownership in the Dutch context are described. We conclude that there is dichotomy in the Dutch housing market, where in particular households owning their own house before 1992 have seen their capital grow strongly and have profited from this development both in and outside the housing market. This growth was made possible by the strong increase in house prices, the ample financing opportunities, the fiscal facilities and the limited supply of newly constructed high quality owner-occupied houses. In this context one can speak of a lever operating generated by the owner-occupied housing sector. The baby-boom generation profited most from this operation. On the other hand, those households which have not yet, or only recently, entered the owner-occupied housing sector, are confronted with enormous risks. In addition to the risks for individual houseowners, there is also a risk that the stability of the Dutch economy will be damaged because house price rises which go together with a long-term substantial credit expansion can become detached from the underlying fundamental factors.