Like the tulips in Amsterdam’s Vondelpark, the city’s luxury real-estate market is blooming. After a tough, six-year slump—property values fell by as much as 20% between 2008 and 2013—prices in Amsterdam’s most affluent areas are finally on an upward trajectory and have risen 10% in some areas over the past year, according to Statistics Netherlands, which monitors house prices. The average property price in the city is €272,438, or about $300,000, and some areas are back to peak prerecession levels. Partly driving the rebound is the potential return investors can get on real estate relative to what banks are paying on deposits, says Kees Kemp, a partner at Broersma estate agents. “People are not getting any interest from the banks, and the trust in banks is less, so they have decided to invest in real estate,” he said, referring to the billions of euro the Netherlands has had to spend on bank bailouts during the recession. The city’s most aspirational area for singles and couples is the canal belt, specifically alongside the three widest and most gracious canals of the Dutch Golden Age: the Herengracht, Keizersgracht and Prinsengracht. Each curved waterway is lined with beautiful 17th-century townhouses built for wealthy merchants. Most of the homes still have a hook mounted close to the eaves, part of a pulley system to haul furniture and wares to upper levels. Today these houses have mostly been subdivided into apartments that sell at around $819 a square foot. “People love the historical atmosphere and the fact you are near Amsterdam’s opera and museums,” said Mr. Kemp. Another benefit, added Barbara van der Grijp, managing director of real-estate agency Engel and Völkers in Amsterdam, is canal house owners can apply for a license, at an approximate annual cost of $1,100, to moor a small boat for leisurely cruises around the city. Currently on the market is a canal house on the Herengracht dating from around 1740. The 4,682-square-foot property has four bedrooms and three bathrooms, with plenty of original features, including marble floors and fireplaces. It is listed for $3.088 million, according to agency CSV Makelaars. Outside the canal belt, families looking for more space, as well as the city’s best primary schools, tend to cluster on the south side of the 120-acre Vondelpark, Amsterdam’s version of Central Park. These streets are lined with fine redbrick villas mostly built in the early 20th century and are especially popular with overseas workers because of their proximity to international schools. The neighborhood also has upscale street cafes and boutiques that are too far off the beaten path to attract many tourists. This is the most expensive real estate in town, with a typical 3,200-square-foot terraced house priced at around $3.3 million (or around $1,037 a square foot). Detached homes measuring 7,000 to 8,600 square feet are rare, and thus attract a premium. Expect to pay around $8.82 million (or from $1,260 a square foot). For buyers who like hip, up-and-coming locations, Marc Crone, the owner and a director of CSV Real Estate, suggests the area around De Hallen, a former tram depot just north of the Vondelpark. In 2013 it reopened as a 290,000-square-foot space for food stalls, galleries and bars. And its success has drawn the young and fashionable to the area where they can purchase apartments priced at between $510 and $560 a square foot. Overall, Amsterdam’s prime market is tiny: Only about 60 homes priced at $2.2 million or more are sold in the city each year, said Mr. Kemp, who is Knight Frank’s affiliate in Amsterdam. It is also a mainly domestic market. Mr. Kemp says around 75% of buyers are Dutch, and they tend to live up to their national reputation for being cautious and somewhat conservative. The Dutch are “generally less prepared to pay for luxury,” he said. “Things like a concierge, a wellness center are not things they want to pay for.” The overseas buyers who do invest in Amsterdam tend to be those who work there. The city is home to scores of international companies, including the Russian energy company Gazprom, the Russian telecoms firm VimpelCom, fashion brands Nike, Adidas, Calvin Klein and Tommy Hilfiger, banks including ABN AMRO, and e-commerce companies like Booking.com. A modern option currently for sale is a stylish loft apartment in Nieuwezijds Voorburgwal, the center of the city, listed by Broersma. The two-bedroom, one-bathroom property has 2,056 square feet of living space, plus three balconies. The asking price is $937,400. Amsterdam has no restrictions on foreign property buyers. There is a purchase tax of 2%, plus a fee of 1.5% to the real-estate agent. Sellers also pay their agent, but there is no capital-gains tax. There is, however, an annual property tax, levied according to the size of the property—between $1 and $1.50 a square foot. Charles Grayson, an agent with 27 Huis real estate, predicts that more overseas buyers will succumb to Amsterdam’s charms. The weak euro is making it an attractive option for British buyers in particular. Mr. Kemp describes Amsterdam as a village. “It is different from London or New York because it is easygoing,” he said. “It is safe; my daughter can cycle home in the evening and I am not worried. I do not lock my home. It is a unique lifestyle for a city.”