Resi was the sector that attracted the most capital in the Dutch market in 2020 and will continue to do well in 2021, delegates heard at Real Asset Media’s European Outlook 2021 – The Netherlands, which was held online recently.
“Last year residential became the largest sector in the Netherlands and it is set to remain the largest this year,” said Jordy Diepeveen, director, head of acquisitions, Savills Netherlands.
Activity accelerated especially towards the end of the year and the market was red-hot in December, ahead of an increase in the residential transfer tax for investors, which went up on 1 January.
Some of that tax effect will dissipate in the next few months, but the sector will continue to attract interest because of the supply and demand imbalance.
Even niche residential sectors are becoming mainstream as investors look for alternatives.
“Residential in general is Number One on investors’ lists and progress must be made quickly because one million houses are needed in The Netherlands,” said Claudia van Haeften founder and CEO, Societeit Vastgoed. “But looking ahead, the big trend will be senior housing because it is very much needed.”
Even the most risk-averse lenders are willing to finance resi because it is seen as a safe investment, not just in Amsterdam but across the country.
Urbanisation will resume after Covid
“The urbanisation trend may have stopped now because of the pandemic, but it will come back,” said Rogier Bos, real estate finance Benelux, Berlin Hyp. “Conservative lenders continue to focus on the residential market outside the capital as well, because The Netherlands has a great number of attractive cities where people want to live.”
Banks are less keen on the office sector because prospects are less certain.
“The office is a complicated sector, no one knows what is going to happen and lenders are very risk-averse as low demand and low yields are not a good combination,” said Bos. “There’s room for alternative lenders to step in and finance deals that the banks are not prepared to finance.”
However, there are reasons to be more optimistic about the office sector in The Netherlands than other countries, said Diepeveen.
“The Netherlands has long been a pioneer in the working-from-home trend, so the pandemic has had less of an impact on the sector,” he said. “Investors still have faith in Amsterdam and in the core segments in other cities, but not in secondary offices. There’s a real split in the market.”