Buyers wait on Washington (or The Hague)

Political polarization is stunting the housing market recovery, a recent article from The Economist suggests. Drawing on similarities between the Netherlands and the U.S., the report links uncertainty about future government regulations to a retarded housing market.

In the Netherlands, the housing market has previously been heavily subsidized by its government in the form of the mortgage interest tax deduction (MID). However, growing division between political parties over housing policies has made many realize that their home financing hinges on the stance of whichever political party is currently in power.

Thus, Dutch citizens are hesitant to purchase a home until they are certain of what to expect in the form of government aid.  Because Dutch buyers are stuck at this red light, so is the rest of their real estate market.