Savills foresees residential investment volume to outperform last year's total of € 2.85 billion

According to the recent report 'Spotlight: Residential property market – the Netherlands' by international real estate advisor Savills, the residential investment volume reached close to € 1.9 billion by the end of Q3 2016 and is likely to outperform last year’s total of € 2.85 billion.

The largest investment share has been taken up by Dutch investors, as the likes of Bouwfonds, Amvest, Altera, Syntrus Achmea, ASR, Woonhave and Vesteda actively optimised their portfolios.  Unprecedented is the fact that the high demand and the search for yield by investors led to further yield compression resulting in higher investment values than when sold to owner occupiers. As investor interest remains large and fundamentals in both the rental and owner-occupier market strong, Savills expects a further contraction of residential yields.

In a number of cities, like Amsterdam and Utrecht, housing demand far outstrips supply, rapidly driving up house prices. As a result Amsterdam scaled up new developments and aims to deliver 50,000 residential units in the period 2015-2025.

Jeroen Jansen, Associate Director Research, Savills Nederland: "As new developments fall far below what's needed to fulfill the housing need in the Netherlands, the gap between supply and demand is only getting larger. Especially in the Randstad area, where we find the steepest household growth and the least amount of space.”

Bas Wilberts, Head of Alternative Investments at Savills Nederland, adds: “For the third successive year the investment volumes in Dutch residential real estate are unprecedentedly high. However, due to the attractiveness of the Netherlands as a destination country for (international) capital, they would’ve been even higher if there was more available product.”

Major challenges in the residential market include the growth of one-person households, the ageing of the population, the decrease of population at the fringes of the country and the affordability, especially within the private rental market.

You can read the full research report here.