On my fourth and most likely my final visit to EXPO REAL as Minister for Housing I am pleased to see that the housing market is picking up on the back of the economic recovery and international investors are showing an increasing appetite for Dutch residential investment.
My most important task as Minister for Housing was to jump-start the housing market in both the rental and home ownership sectors. I have worked hard to restore confidence by offering certainty. Certainty for home owners about mortgage interest relief. Certainty for social tenants that government will keep renting affordable. And certainty for investors by tackling distortion on the housing market.
When I first visited EXPO REAL in 2013 the Dutch residential investment market was dominated by domestic investors. In the wake of the economic crisis investment volumes were low. Buoyed by the low interest rates, government policy reforms and the proven track record of the Dutch housing market the investment volume for Dutch housing doubled in 2014 in comparison with previous years according to analysts. The presence of international investors on the Dutch rented housing market has no doubt contributed to increased activity and competition on the housing investment market.
Although we faced some exceptional events in the last month of 2015 and in the first half of this year, confidence is still strong in the Netherlands. We have seen economic growth as well as a steady increase in new jobs. So far, the influence of Brexit on the Dutch economy is not visible.
The positive sentiment in the residential market in 2015 even advanced in 2016. House sales is now on the same level as in the best pre-crisis years and is still increasing.
The number of new-build homes and units built in transformed industrial areas and office buildings stepped up since 2015. Yet, the demand grew a lot faster.
The shortage we noticed in the Amsterdam and Utrecht regions is spreading rapidly over the rest of the Netherlands. As a result sales prices have risen above the estimated level.
A debate is taking place on how to increase the number of building sites to fulfil the growing demand. So it is not hard to predict that house prices and home rental levels will keep on rising.
The residential rental market shows rising rent levels and very low vacancy rates. Not only in the very strong market regions.
Both Dutch and foreign institutional investors show a growing appetite for residential portfolios. We see a growth in the capital queue and an increase in new contracted housing stock acquisitions by these investors.
HPP (Net)working and talking together.
‘Working’ together, ‘net’working together, and especially ‘talking’ to each other.
2016 has so far been characterised by a strong recovery in our sector, not just within our borders, but in other European countries surrounding us as well.
Deals are again being made, projects are under development, and investors and property developers, both domestic and foreign, once again see opportunities. The speed at which deals are being reached can be scary at times,
seeing that they slowly but inevitable lead to a changed market, one that is dominated by demand due to very limited supply, especially in big cities. Naturally, not all vacant offices or stores can be transformed into living accommodation, nor should they be. But transformation can in some cases be the best solution, seeing that it draws newly designated buildings and their occupants back into a much desired circular economy. Many players are therefore put under considerable pressure to not miss out on domestic and foreign investors.
But aren’t we forgetting something?
Everyone talks about ‘sustainability’, but our sector is not particularly inclined to invest in sustainable relationships. Despite the fact that major foreign investors have been active in the Netherlands for many years, we often have to conclude that we do not really know them, and that playing the occasional round of golf does not really constitute a sustainable relationship. The EU, supposedly a “collaboration” between countries, and the “communications” with their respective constituencies lay bare what happens if there is a general lack of sustainability and transparency. The apparent lack of believing and investing in long-term relationships can easily lead to events such as the recent ‘Brexit’ and intense discussions between the various Member States.