Country Report Netherlands Q3-2022
“The current situation is leading to paralysis.”

Dear readers,

“The Dutch real estate market is at a turning point. The rapid hike in interest rates has led to many deals being called off or postponed. Rising initial yields have caused real estate values to fall by 10 % to 15 %. The inflation rate in the Netherlands is one of the highest in Europe, standing at 14.5 % in September 2022. Because rental income in the Netherlands is subject to indexation, price growth also affects the real estate market. Uncertainty about rises in rental costs as well as high energy prices are weighing heavily on the retail sector. In addition, the savings rate among consumers has increased, pushing down consumer demand. The logistics industry is under pressure, with initial yields here falling to 3 %. Demand for residential real estate remains very high due to population growth and immigration. Building new properties is a crucial task, but a large number of investors are adopting a wait-and-see approach because of the many uncertain factors (material costs, shortage of workers and measures to reduce greenhouse gas emissions). The general feeling is that the current situation is leading to paralysis. The next three to five months are likely to remain quiet until the market has stabilised. Watch this space!”


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

REECOX Netherlands continues negative trend in Q3

The Dutch real estate index has recorded a negative performance for the fourth quarter in a row. After recovering slightly at the beginning of the third quarter (July: +2.7 %), the REECOX Netherlands again posted losses in August (3.4 %) and September (4.0 %). An overall performance of -4.7 % meant that the index stood at 175.8 points at the end of the third quarter, placing it within the mid-range of the Deutsche Hypo REECOX.

Business sentiment deteriorates significantly

Although all market variables contributed to the current trend in the Dutch real estate index, they varied considerably in terms of their impact. The FTSE EPRA/NAREIT Netherlands real estate share index made a positive start to the third quarter (July: 10.4 %), before dropping in both August (6.7 %) and September (14.2 %). The index fell by 11.6 % compared to the previous quarter to around 316.9 points, its lowest level since May 2020. The blue-chip index AEX 25 suffered much lower losses, declining by 2.8 % quarter on quarter to stand at roughly 640.6 points. Assessments by real estate experts within the scope of the Economic Sentiment Indicator (ESI) amounted to an index value of 90.6 points at the end of the quarter – a significant fall of 8.4 % as against Q2.

Synopsis of Input Variables and Real Estate Economic Situations Q3-2022

Country

Stock Index

Real Estate Economy Index

Economic Indicator

Base Interest Rate

Interest Rate 10-Year Government Bonds

Q2-2207/2208/22Q3-22Delta (%)
Q2-22 / Q3-22
DE
do
dodo
dodo
eq
upup
289.8
289.2
278.1
258.9
-10.7
GB
do
dodo
dodo
upup
upup
202.5
195.8
198.1
189.5
-6.4
PL
dodo
do
dodo
upup
up
183.1
181.9
179.4
175.1
-4.4
NL
do
do
dodo
eq
upup
184.8
189.5
183.2
175.8
-4.9
FR
do
do
dodo
eq
upup
225.6
231.9
227.5
219.3
-2.8
ES
dodo
do
dodo
eq
upup
178.4
174.9
175.3
172.9
-3.1