House Prices Aren't Normal. You've Just Normalized.
A million-euro house in Amsterdam isn't expensive. It's a signal that something fundamental is broken in the system.
House Prices Aren't Normal. You've Just Normalized.
What seems exceptional is as old as you are.
My father bought his first house for four years gross salary. This was in the seventies. Not because it was cheap, but because that was the ratio. You worked four years hard, you bought a house, you worked the rest of your life paying off the mortgage. That was the deal.
Today, people in Amsterdam pay twelve, fifteen, twenty years gross salary for a canal house. They see this as normal. They see this as reality. But this is an anomaly of less than twenty years old.
This matters: we've never seen this before. Not in the Netherlands. Not in the Western world, not at this scale. This isn't a cycle. This is a break.
There are only two ways this ends. Either house prices drop dramatically. Or wages rise equally dramatically, which only happens through significant inflation. Or home ownership shifts toward investment funds and foreigners, and the Dutch rent. The third option is already happening.
Florian works because many houses in the Netherlands are starting to see the impossible. They see that as an owner they can't get past the system and they'd rather rent it out than carry the financial bureaucracy of ownership. They prefer liquidity to bricks.
But if you still want to buy: understand what you're buying. You're not buying a house. You're buying a bet that someone else will pay more for it later. That's speculation. That's not investing. That's mortgage gambling.
The normal state is that a worker can buy a house with three to five years gross income. Anything above that is a symptom of artificial scarcity created by regulation, not real need.
So yes, house prices are high. But that says more about our system than the product. They're not real. They're speculative. And what's built speculatively breaks when sentiment shifts.
Be careful who you are when you pay a million for a house you could've bought for 400,000 ten years ago. You're not smarter. You're not richer. You're just bound.
Sources: Shiller, Robert J., Irrational Exuberance (Princeton University Press, 2015); Statistics Netherlands (CBS) Housing Market Data (2024)
Source: Shiller, Robert J., Irrational Exuberance (Princeton University Press, 2015)