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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.
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 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.
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.
Country | Stock Index | Real Estate Economy Index | Economic Indicator | Base Interest Rate | Interest Rate 10-Year Government Bonds | Q4-18 | 01/19 | 02/19 | Q1-19 | Delta (%) 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 |
