Country Report Netherlands Q3-2019
“Sentiment is positive, but we are seeing the first move towards caution.”

Dear readers,

As interest rates are expected to remain low, there seem to be few suitable alternatives to real estate investments – in spite of significantly falling returns. Sentiment is positive, and demand remains enormous for all types of real estate, even though it is becoming more and more difficult to find real estate investments at reasonable prices. But in view of the significant price increases, how likely is it that there will be further leeway for real estate yields to continue falling? Even though it seems like anything could happen during the current real estate cycle, there are indeed some initial investors who are growing cautious in light of the level that has been reached and who are increasingly taking a wait-and-see attitude. Although real estate yields have not yet bottomed out, we are very close to seeing that happen.


Your Wouter de Bever

Contact

Mr Wouter de Bever
Managing Director Netherlands

Phone: +31 20 691 45 51
E-mail: Wouter.de.Bever@Deutsche-Hypo.de

Dutch real estate market has seen positive development

Following consistently negative quarter-on-quarter development since the beginning of 2018, the Dutch real estate sector saw its first glimmer of hope in the third quarter 2019: with a 1.5 % rise to 192.0 points, it achieved the most positive change among all European countries surveyed.

All input variables positive

All input variables contributed to this turnaround. The AEX 25 leading stock market index has seen generally positive development since early 2019, with growth of 3.3 % in the third quarter contributing significantly to the positive results of the Dutch REECOX. The months of July (+1.8 %) and September (+3.9 %) sent positive signals, while August (-2.4 %) saw slightly muted development. Overall, the index reached a new peak at 580.2 points, last surpassed only in May 2001. The FTSE EPRA/NAREIT Netherlands real estate share index also saw overall positive development, even though July (-7.9 %) and August (-1.3 %) still had negative signs. September’s rise of 11.5 % marked a clear turning point, however, resulting in a positive overall quarterly trend of +1.4 % to 823.8 points. The prolonged deterioration in business sentiment as recorded by the Economic Sentiment Indicator (ESI) also appears to have come to an end. After an approximately year-long period of decline, it is climbing once again with a quarter-on-quarter rise of 1.8 % to its current level of 104.1 points.

Synopsis of Input Variables and Real Estate Economic Situations Q3-2019

Country

Stock Index

Real Estate Economy Index

Economic Indicator

Base Interest Rate

Interest Rate 10-Year Government Bonds

Q2-1907/1908/19Q3-19Delta (%)
Q2-19 / Q3-19
DE
eq
up
do
eq
do
296.6
296.2
295.4
295.6
-0.3
GB
eq
up
dodo
eq
do
198.9
198.6
192.7
189.5
-4.7
PL
do
up
eq
eq
dodo
186.8
186.5
184.9
185.0
-1.0
NL
up
up
up
eq
dodo
188.4
189.8
189.0
192.0
1.9
FR
up
up
eq
eq
dodo
231.8
232.1
232.8
234.7
1.3
ES
eq
up
eq
eq
dodo
198.0
198.6
199.8
199.0
0.5