Market Trends of Netherlands Luxury Residential Real Estate Industry
Growing Number of High Net Worth Individuals Driving the Market
The Netherlands ranked as having the seventh highest disposable income in Europe. The data is based on FSO's (Federal Statistical Office, Switzerland) survey of 30 European countries. As the disposable income of the households grows, so does the number of High Net Worth Individuals (HNWIs). In the third quarter of 2022, the gross disposable income of Dutch households was EUR 117.7 billion (USD 124.93 billion). It was a 10% increase from Q3 2021. The number of millionaires in the Netherlands continuously grew for the seventh consecutive year. According to a study commissioned by the Cabinet, the richest 1% of Dutch households own 26% of the country's total wealth. The wealthiest 1% own no less than 75% of all substantial business interests in the Netherlands. For them, this interest constitutes 60% of their total assets.
It is estimated that the number of individuals in the Netherlands with a net worth of over USD 5 million reached almost 50 thousand in 2022. An increase in luxury residential real estate property purchases followed the increase in HNWIs. These HNWIs want to upgrade their lifestyle. They are willing to spend their money to buy apartments in major cities, holiday homes, and vacation homes. These individuals with good financial knowledge see luxury properties as good investment opportunities. Also, the new individuals entering the millionaire bracket seek to buy luxury properties for a lifestyle upgrade. Thus, the increase in HNWIs in the Netherlands is driving the country's luxury residential real estate growth.
Smart Homes Set to Redefine Luxury Housing
A shift is happening in terms of what used to be called luxury housing. Earlier, home buyers considered large houses with opulent designs and amenities at prime locations luxurious. Beyond traditional means, customers are now looking at improving the quality of their life by integrating technology. Emerging trends reflect that technology will be at the core of luxury living. It will redefine the luxury home concept in the Netherlands. For luxury home buyers, digitally enabled homes offer ease and comfort from the tedious everyday tasks that consume one's time. Advanced technologies like Artificial Intelligence (AI) and Machine Learning (ML) enabled developers to introduce many tech-led premium features that will drive customer preferences in the luxury housing market. There is a rising demand for innovative home products in the country.
Revenue in the Smart Home market in the Netherlands is projected to reach USD 1.91 billion in 2023. Nearly 75% of the Dutch population aged 12 and over currently owns one or more devices connected to the internet and transfers data to one another without human intervention. Smart meters for water, gas, or electricity are particularly popular. Statistics Netherlands (CBS) reported this after a survey on ICT usage among households and individuals conducted among 6.5 thousand people aged 12 and over. 59% had a smart water, gas, or electricity meter at home that could be read remotely. Over a quarter used a smart thermostat, and two in ten used a virtual assistant (e.g., Siri, Google Home, Amazon Alexa, Bixby) that can be controlled via an app or a smart speaker. Lighting, smart plugs, or other systems for smart living, smoke detectors, security cameras, or other security systems are less commonly used by people: 14% and 11%, respectively. They used such systems at home. In the Smart Home market, active households are expected to reach 7.26 million users by 2027.
