Rare risks of flooding in the Netherlands
Marnix Hazelhoff
21 February 2025
Reading time 4 minutes
Bosker et al. (2014). Netherlands: Evidence on the price and perception of rare flood disasters.
The Netherlands is globally known for its advanced water management. Despite annual investments of €1.1 billion in dikes, locks, and water barriers, homebuyers perceive the risk of flooding as more significant than expected. This article examines how flood risks affect housing prices and what this means for both buyers and sellers.
Key findings
Impact of Flood Risk on Property Value
Homes in areas with an increased flood risk are on average 1% to 5% less valuable than comparable homes in safer regions, despite the Netherlands having one of the best flood defense systems in the world:
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This indicates that buyers take the risk seriously and factor it into their purchasing decisions.
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Market prices are influenced not only by actual safety measures but also by the subjective perception of risk.
Long-Term Impact of Flooding
The effects of flooding on property prices are often long-lasting:
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House prices remain structurally lower in previously affected areas, even when additional protection measures have been implemented.
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Buyers consider not only current safety measures but also the historical vulnerability of an area.
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Fear of future damage and rising insurance costs negatively impacts the housing market.
What does this mean in?
For Buyers:
Always research the flood risk and the existing water protection measures in the area. These factors can play a significant role in price negotiations and the future value development of a property.
For Sellers:
Highlight investments in water safety and provide potential buyers with clear information about protective measures. This can help increase the selling price and accelerate the sales process.
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Conclusion
Flood risk affects not only safety but also property value and market stability. Despite investments in flood protection, risk perception remains a key factor in buying and selling decisions. Education, transparency, and targeted measures can help mitigate the negative impact on the housing market.
