EXPO Real: NL trends positive but tax is ‘still an obstacle’

The climate is positive in the Dutch market despite the current slowdown due to macro-economic factors, experts agreed at Real Asset Media’s Netherlands investment briefing, which took place last week at the International Investors Lounge at EXPO Real.

“The fundamentals of the Dutch market are good and the long-term trends are undoubtedly positive, but there is such volatility that investors prefer to wait and see,” said Maarten Briet, co-head Netherlands real estate, Schroders Capital.

Even the logistics sector has hit the pause button, despite strong demand and a chronic lack of supply.

“The occupational market is even stronger now than it was twelve months ago and there is very little land available for new developments,” said Sander Breugelmans, senior vice president, head of Northern Europe, Prologis. “But rising interest rates are leading investors to sit on the fence.”

Interest rates are spooking the market, but investors should also take into account some positive developments. The Netherlands has always been known for its high degree of regulation, most notably in the residential sector.

“Now there is a growing realisation that tight regulations are causing delays and there is more willingness on the part of local governments to be flexible,” said Joost van der Zon, founder owner, Houzr platform. 

The authorities seem to have realised that regulations were not helping to achieve their goal of getting more much-needed houses built and that should lead to more flexibility.

However, tax is still an obstacle. “Taxation is more onerous in the Netherlands, so there’s less of an incentive for foreign investors compared to Italy or France,” said Onno Adriaansens, co-chair European real estate group, lead real estate desk the Netherlands, RSM. “Also the real estate transfer tax has increased from 4% to the current rate of 10.4% in the space of a decade.”