Market outlook 2024-2026
In November 2023, Bouwinvest published its Dutch Market Outlook 2024-2026. In this document, you will find more detailed insight into macro trends, real estate market conditions and expectations for the years ahead.
Key trend | Impact real estate market | Portfolio management |
Demographic and social changes | ||
Urbanisation | Higher demand in urban areas results in bigger housing shortage | Focus on Holland Metropole Alliance & Zwolle, Arnhem, Nijmegen |
Higher than anticipated household growth (11.7% until 2042) | Pressure on prices (rental and owner-occupier markets) | Focus on lifecycle-proof apartments & family homes in mid-rental locations |
Immigration is main driver of growth in population (but is more volatile) | More fluctuation in demand for rental homes because of more volatile migration | |
Ageing & smaller households | Growth of qualitative housing shortage | Focus on one and two-bedroom apartments |
Peaking interest rates & stubborn inflation | ||
Market in search of a new price equilibrium | Yield shift on the investment market | Attractive product, able to respond to possible redemption requests |
Loan increase & lower unemployment | Bifurcation on the owner-occupier market on price range and asset quality | Identifying and focus on assets that fully meet strategy (standing and acquisitions) |
Number of new-build projects is diminishing | ||
Resulting in bigger housing shortage in short term and higher demand for rental housing | ||
Affordability and regulation | ||
Affordability (and housing shortage) is a growing social problem to which government responds through new (rental) regulation | Less supply and high demand in the mid-rental segment | Balancing cost control and affordability tenants |
Higher demand and market rental growth for residential assets just above the new threshold | Focus on (low) mid-rental segment on the acquisition side and within Fund's portfolio (low and high mid-rental segment) | |
Negative impact on rent due to regulation | Optimisation by divestments in the event of large deviations between market rent and regulated rent | |
High-quality portfolio is less vulnerable to possible new regulation due to high number of WWS points | ||
Sustainability and responsibility | ||
Strict sustainability requirements | Increasing yield spread between green and brown assets | Integrated Paris proof ambition in the maintenance cycle |
Reducing environmental impact |