In the city of Rotterdam the minium price for plots destined for residential buildings have been lowered by 3% compared to last year. The decrease is seen as a compensation for increased building costs.
The minium price is a guideline. In practice, the value of the plots is measured by extracting the building costs from the sale-price of the building, the ´VON-price´. This way of calculating means that the actual plot price is dependent of the type of building that is actually built on the site. This means that the local government can never simply raise prices at their convenience.
Rotterdam reasons that higher building costs are caused by new building guidelines from the national government. These guidelines dictate that developers need to comply to higher quality standards, which lead to higher investments.
Because the city council takes these increased costs into account and it accepts that the VON-price is not raised, the plot prices drop. The collaboration of the local government in the market is stimulated by the coucils wish to keep up the pace in the development of property.
source: vastgoedmarkt.nl
