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Dear readers,
“Lack of housing space is still an issue for the Dutch real estate market. In order to meet demand, 100,000 new homes need to be built every year, but for numerous reasons this number is far from being achieved with the current number of 50,000 to 60,000 homes per year. In addition, the Netherlands applies the strictest standards in Europe in the field of nitrogen, so that without government intervention, a building infarction is imminent. The war in Ukraine is further exacerbating the supply situation, as space is desperately needed for people fleeing the war. The scarce resources and the partial breakdown of supply chains on account of factors such as the renewed lockdowns in China are making the problem worse and resulting in challenges for the overall real estate market. In some cases, we are already seeing new construction projects grind to a halt across all asset classes, coupled with a wait-and-see approach regarding construction costs and material prices. Recalculation is the norm. There is also some uncertainty as to what will follow the ECB’s bond purchase programme. Meanwhile, investor appetites for real estate remain high, and the market is flush with funds. The combination of circumstances is reflected in returns, with logistics properties reaching levels otherwise seen in the residential sector – a development that cannot be sustained in the long term.”
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
The negative development already apparent in the Dutch real estate index in November 2021 continued at the start of the year, with losses amounting to 2.0 % in January and 1.8 % in February. By contrast, March posted a rise of 0.1 %, keeping performance more or less constant. The REECOX Netherlands fell below the 200-point mark as the first quarter drew to a close, losing a total of 3.7 % to stand at 194.6 points.
All input variables were down quarter on quarter. The AEX blue-chip stock market index was negative in each month, with January (-5.4 %) and February (-3.4 %) playing a particularly prominent role in the substantial decline of -9.2 %. The index finished the quarter at 724.2 points, despite a more moderate decrease of 0.8 % in March. The FTSE EPRA/NAREIT Netherlands real estate share index also posted negative development on the whole on account of a steep drop in January (-8.3 %) that the positive performance seen in February (+1.9 %) and March (+3.3 %) was unable to make up for. Sentiment among the experts polled as part of the Economic Sentiment Indicator (ESI) fell for the third quarter in a row to finish March at 103.3 points.
Country | Stock Index | Real Estate Economy Index | Economic Indicator | Base Interest Rate | Interest Rate 10-Year Government Bonds | Q4-21 | 01/22 | 02/22 | Q1-22 | Delta (%) Q4-21 / Q1-22 |
|---|---|---|---|---|---|---|---|---|---|---|
DE | dodo | do | dodo | eq | upup | 343.4 | 340.1 | 334.3 | 320.6 | -6.6 |
GB | up | do | upup | upup | upup | 218.5 | 220.7 | 218.6 | 218.2 | -0.1 |
PL | do | do | dodo | upup | upup | 197.6 | 194.9 | 190.2 | 189.5 | -4.1 |
NL | dodo | do | do | eq | upup | 202.3 | 198.1 | 194.5 | 194.6 | -3.8 |
FR | do | eq | dodo | eq | upup | 251.6 | 248.7 | 246.7 | 240.0 | -4.6 |
ES | do | up | dodo | eq | upup | 186.0 | 186.1 | 187.0 | 181.6 | -2.4 |
