A record amount will be invested in Dutch homes in 2019. This year, investors spend more than 8 billion euros on residential real estate for the first time.
Investment products such as bonds do not provide enough returns. That is why more and more investors choose to invest their money in houses that they can rent or sell. "A record amount of 8 billion euros was already achieved in 2018, this year we are heading for 8.5 billion euros," says Frank Verwoerd, head of research at Colliers.
The investments are made by pension funds, private equity parties and housing associations. But more and more private investors are finding their way on the real estate market. New construction in particular is popular: this attracts 60 percent of all investments. Due to the investments, the supply of rental properties in the private rental sector has grown considerably.
Highest return outside the Randstad
It is striking that real estate investments yield the most outside the Randstad, a large urban agglomeration that consists Amsterdam, Rotterdam, Utrecht and The Hague. Investors achieve the highest returns in Emmen, Heerlen, Venlo and in the municipality of Súdwest-Fryslân. The rental income in relation to the purchase price is almost twice as high in these regions as in Amsterdam. However, there is more risk of vacancy and lower rental growth. Housing prices are also rising less rapidly than in the capital city.
Investors in Haarlem, Haarlemmermeer and Westland are less at risk. The demand for rental properties in these municipalities will continue to rise in the coming years. The situation is different in the Haaglanden region, where housing policy ensures that less is invested in homes. "Investors are withdrawing from municipalities that have strict policies on the housing market," Frank Verwoerd explains. "This means there has been a shift to other regions."
In Amsterdam, the increasing risks of investing (due to the rising rents and rent restrictions of the municipality) have not caused investors to ignore the city. On the contrary: popularity continues to increase. Investors in the capital still pay the most for a home, followed by Utrecht and Amstelveen. In the first three quarters of 2019, a total of 715 million euros was invested in housing in Amsterdam.
Growth will not continue in 2020
The investment volume is expected to decrease by 20 to 30 percent next year. Due to the nitrogen discussion and the limited number of construction sites in large cities, fewer rental properties will be up for sale. The growth in recent years was mainly due to institutional investors, who cleaned up their portfolios by selling old homes. That wave of sales seems to be coming to an end for the time being.