Record year for Dutch property market

Posted on 16-01-2020 by D. Voesenek

Real estate investment in the Netherlands reached a new record level in 2019. At 20.8 billion euros, the investment volume of 2018 (20.7 billion) was surpassed. In 2019, the most was invested in residential properties, at 7.6 billion euros, followed by healthcare real estate at 1.1 billion euros. Banks took a more restrained and constructive role in financing real estate transactions last year.

Early last year, investment volume was still expected to decline in 2019. However, due to low interest rates, investors are still always eager to invest their money in real estate. In addition, last year more and more real estate was purchased outside the Randstad. As many as 70% of transactions took place outside the four major cities. Residential and industrial property investors (distribution centres) in particular moved their borders. The reason for this relocation is that there is almost nothing left for sale in the big cities or at too high a price. This scarcity is accompanied by higher prices and falling yields.

Changing role of banks

Dutch banks were particularly selective in their funding in 2019. Their focus was on larger well-known customers and transactions with a good earnings model. Banks are also taking on a different role more often. They construct tailor-made financing, seeking to combine it with other forms of financing. As a result, the financing offer for smaller transactions and construction projects fell away in recent years. International financiers, international (institutional) financing platforms and other alternative financiers are now increasingly meeting this need.