Country Report Netherlands Q1-2019
“The phrase ‘wait and see’ perfectly sums up the current market phase.”

Dear readers,

Sometimes a zero says a lot. The change in the Dutch Real Estate Economy Index in the first quarter of 2019 was exactly 0.0%. You could call it pure stagnation. Or, from another perspective, it could be waiting with bated breath. There is a constant flow of deals and the level of capital in the market remains high. However, considering the continuing pressure on yields, there is a sense of caution on the part of investors in all areas. Many are staying away from new residential investments, while also hesitating to invest in the office sector. Meanwhile, there is now a shortage of office space in the Netherlands. The conversion of office properties into flats and hotels over a number of years means currently increasing demand for premium office space cannot be met. Those factors are compounded by uncertainty concerning Brexit, as it could have a significant impact on the Netherlands, which has strong links to the UK. All in all, the phrase ‘wait and see’ perfectly sums up the current market phase.


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

Stagnation of the Dutch Real Estate Economy Index

The negative trend in the Dutch Real Estate Economy Index at the end of 2018 continued into the new year. However, a decline in the index in January was followed by a slight rise, so that the end of the quarter saw the same levels present in December (191.4 points). That means the Dutch Real Estate Economy Index remains at its lowest level since summer 2015.

Rising stock markets, deteriorating business climate

The development of the input variables was somewhat contradictory. On the one hand, the stock markets developed very positively. The Dutch leading index AEX 25 recorded double-digit growth of 12.5% to a closing level of 548 points. That compensated for the significant losses in the fourth quarter of 2018. And following its historic collapse in the previous quarter, the real estate share index FTSE EPRA/NAREIT Netherlands recovered slightly, although it remained volatile and stayed below the 900 point mark (898.8 points). Compared to the fourth quarter of 2018, the index rose by 6.4%. On the other hand, the Economic Sentiment Indicator (ESI) remained unaffected by those developments and continued its downward trend in the first quarter of 2019, with the exception of a positive episode in February. Overall, the business climate indicator rose by 2.2% to its current level of 105.2 index points.

Synopsis of Input Variables and Real Estate Economic Situations Q1-2019

Country

Stock Index

Real Estate Economy Index

Economic Indicator

Base Interest Rate

Interest Rate 10-Year Government Bonds

Q4-1801/1902/19Q1-19Delta (%)
Q4-18 / Q1-19
DE
upup
up
do
eq
do
298.2
303.4
300.8
303.4
1.7
GB
up
upup
dodo
eq
do
204.9
205.5
200.7
205.1
0.1
PL
up
upup
do
eq
do
187.5
185.9
186.5
187.6
0.1
NL
upup
up
do
eq
do
191.3
190.4
190.7
191.4
0.1
FR
upup
upup
do
eq
do
223.7
225.4
225.9
228.3
2.1
ES
up
upup
up
eq
dodo
191.8
196.4
196.5
199.3
3.9