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Dear readers,
If you want to know the state of the real estate market in the Netherlands, then you should visit the PROVADA trade fair in Amsterdam. It is both a place where deals are made and a barometer of sentiment. This year the trade fair attracted more than 26,000 visitors, setting a new record. No matter who you spoke to at the trade fair, everyone was positive. There was even some euphoria. The Dutch real estate market is performing better than ever. Demand for real estate is huge, particularly for residential, logistics, office and hotel properties. Considering that interest rate increases are not expected in the near future, investors have few real investment alternatives to real estate. And constantly increasing prices are not deterring them. The question is how long those developments can continue. Personally, I think prices are gradually topping out. But who knows? Perhaps the present minuscule returns can shrink even further. In the current real estate cycle anything seems possible.
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 positive development of the Dutch Real Estate Economy Index towards the end of the first quarter initially continued at the start of the second quarter, but there was a significant decline in May. Towards the end of the quarter, the development of the REECOX Netherlands reached a temporary low of 188.4 points. Following that decline of 1.6 % compared to the previous quarter, the index is at its lowest level since spring 2015.
The negative development of the REECOX Netherlands was primarily driven by the clear decline in the real estate share index FTSE EPRA/NAREIT Netherlands. It fell by 9.6 % compared to the first quarter. After a brief rise in April, it slumped by approximately 100 points and made further losses in June, to its most recent level of 812.7 points. That was a new negative record for the whole period observed by the REECOX (since January 1991).
The clear downturn in the real estate share index is not currently reflected by the stock market as a whole. Following very positive development at the start of the year, the second quarter was positive overall, ending June at 561.8 points, approximately 2.3 % higher than in the first quarter.
Meanwhile the Economic Sentiment Indicator (ESI) continued to develop negatively: following a decline of 2.3 % it is now at a level of 102.8 points – its lowest level since August 2016.
Country | Stock Index | Real Estate Economy Index | Economic Indicator | Base Interest Rate | Interest Rate 10-Year Government Bonds | Q1-19 | 04/19 | 05/19 | Q2-19 | Delta (%) Q1-19 / Q2-19 |
|---|---|---|---|---|---|---|---|---|---|---|
DE | up | do | dodo | eq | dodo | 303.4 | 302.4 | 303.1 | 296.6 | -2.2 |
GB | up | do | dodo | eq | dodo | 205.1 | 203.7 | 196.2 | 198.9 | -3.0 |
PL | eq | up | do | eq | dodo | 187.6 | 185.5 | 183.7 | 186.8 | -0.4 |
NL | up | do | do | eq | do | 191.4 | 192.9 | 188.4 | 188.4 | -1.6 |
FR | up | do | up | eq | dodo | 228.3 | 230.4 | 230.4 | 231.8 | 1.5 |
ES | eq | up | do | eq | dodo | 199.3 | 198.8 | 198.2 | 198.0 | -0.7 |
