The Dutch residential rental market is expanding rapidly, as a global trend towards urbanization has seen increased demand for such assets. Multifamily Investments are residential buildings ranging in scale and size, from as few as four-five units to as many as several hundred, leased separately to individuals. Key to successful investment is the engagement of a strong and experienced Asset Manager. Of course we offer our Multifamily Residential Investments as comprehensive ‘turnkey investments’ where the administration of the property is handled by our experienced Property & Asset Management Department with no direct investor involvement required in the areas of accounting or tax as our specialised partners will deal with these issues on the investors’ behalf.

Investors in this sector enjoy secure returns of between 5% – 10% annually with potential for significant capital appreciation; and return on investment up to 16% per annum (if using bank finance).

Our Multifamily Investment Strategy is to source Multifamily Investment Properties in strong markets, to source and identify underutilised properties for an investor, undertake a refurbishment programme to maximise efficiency of the property and return the property to the market should the investor wish to realise immediate capital appreciation. We aim to realise the potential to both increase rent roll during times of economic growth and maintaining rental stability in periods of economic difficulty. We mitigate risk by having a number of tenants, i.e. no over reliance on a single income source. And of course we provide comprehensive ‘turnkey investments’ where the administration of the property is handled by our experienced Property Management Department.

So, more sales and higher prices are to be expected, due to;

  • Economic growth to slow slightly during the coming quarters
  • Consumer confidence remains high
  • Mortgage rates expected to remain low
  • The number of transactions to rise to between 200,000 and 220,000 in both 2016 and 2017
  • Dutch House prices to continue rising by 5%
  • Factors underlying these trends are falling interest rates, new house building failing to keep pace, combined with increasing shortages in the market and improved affordability
  • Still marked regional differences, but prices are rising virtually everywhere

Improvements in labor market and purchasing power positive for the housing market

For 2016 and next year we anticipate sustained economic growth across all sectors, with 1¾% growth in GDP for both years. Growth in employment is also positive, which will help to reduce unemployment to 6%. Consumer confidence among Dutch households fell in July from +5 to +1, but is still well above the historical average. This fall would appear to be related to the Brexit referendum result. A potential slowdown in growth caused by Brexit could reduce the willingness of households to make large purchases. Together with the low interest rates on savings, this may lead to extra repayments on mortgages and other debts.

Dutch house prices and number of sales rising

The number of sales in the second quarter of 2016 was 50,315, almost 10,000 more than in the second quarter of 2015. House prices are now 4.4% higher than they were a year ago. Increasing shortages on the housing market, the failure of new house building to keep pace and improved affordability of owner-occupied homes mean that the number of transactions and house prices will continue to rise during the coming quarters too. We expect the number of transactions to continue to rise to between 200,000 and 220,000 sales a year. We anticipate that prices will rise by around 5% this year and next.

At present Amsterdam accounts for a quarter of house price rises in the Netherlands. Without Amsterdam, price rises would have been not 4.4% but 3.4% during the second quarter of this year. Only the province of Zeeland appears to be structurally lagging behind.

Mortgage interest rates fall further and will remain low for the time being

New mortgages amounting to EUR 13.1 billion were approved during the second quarter of 2016, a rise of 29% compared to the second quarter of 2015. This rise is partly due to a rising number of transactions. Since the value of new mortgage approvals is higher than mortgage repayments, gross mortgage debt is rising again. Households are also making extra repayments on their mortgages. We estimate that this is around 1% of the outstanding mortgage sum on an annual basis. Mortgage rates fell further during the second quarter and are expected to remain low in 2016 and 2017. During the past year, the majority of house buyers have chosen to take out fixed-rate mortgages for a longer period.