Transaction volume residential real estate investments up to 4.8 billion euros in first half of 2020

25 June 2020

Transactievolume eerste helft 2020 naar 4,8 miljard euro

In the first half of 2020, a new record in transaction volumes was reached in the Dutch investment market for rental homes. A total of 4.8 billion euros in rental homes was sold, which means an increase of 6.4% compared to the previous record in 2019 (4.5 billion euros in the first half year). Just over 19,000 homes were part of this record volume. The high transaction volume demonstrates that residential investors have a great deal of confidence in the residential investment market. Not only were numerous transactions completed before the crisis, during the crisis more than a dozen transactions were also completed. The transaction volume for 2020 stands in stark contrast to the credit crisis of 2008 to 2013, when an average of 1 billion euros was invested in residential rental homes annually.

2.3 billion euros invested in new-build output
Almost half (2.3 billion euros) of the total transaction volume was invested in new-build output and conversions. Approximately 8,800 new homes will be built with that amount in the next few years. Dutch pension funds remain one of the driving forces behind new-build output, and invested a total of 1.4 billion euros in rental homes, with more than 1 billion euros in new-build output. This adds around 3,700 affordable rental homes to the Dutch housing stock in the coming years. Housing associations were also very active in the first half year of 2020 and represented approximately 10% of the total volume (450 million euros). This is a considerable increase compared to the end of 2019 when this percentage amounted to 3% of the total volume. Of the investments made by housing associations, 76% were invested in new-build output. This confirms earlier research by Capital Value in which 89% of housing associations indicated a willingness to continue expanding and renovating the stock of affordable rental housing.

Percentage of international investors decreases slightly
International investors were more cautious in the Dutch residential investment market during the first half year as a consequence of the uncertainties due to the pandemic in economies over the entire world. The percentage of international investors decreased slightly compared to last year: from 46% at the end of 2019 to 32% in the first half of 2020. This percentage is comparable to 2018, when international investors were responsible for 35% of the transaction volume. The most active international investors in 2020 came from countries such as Sweden, Germany and the United States.

Shortages higher than expected, more supply needed
The most recent forecasts for the increasing housing shortage indicate a rise of up to 415,000 homes in 2024 and therefore investments in new-build output continue to be of paramount importance. To add more affordable rental homes to the housing stock, market parties and the government must cooperate more to accelerate plans. The question remains whether sufficient building permits can be issued in the near future. Recent figures from Statistics Netherlands show that the number of building permits issued in the first four months of 2020 totalled 19,000. This is not enough to address the housing shortage.

Marijn Snijders, Director Capital Value: "It is good news that Dutch pension funds and housing associations have remained very active the past few months and have purchased many new-build rental homes. We anticipate that this trend will continue over the second half of 2020 and that foreign pension funds will also purchase more. Banks play an important role in this, too. Earlier research has indicated that 60% are open to expanding their loan portfolios with Dutch rental homes."

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