7.4

Housing Market Indicator

overall score, actual per Q3 2019

Housing Market Indicator

The housing market indicator haven’t changed much for the third quarter in a row. This implies the market is in balance. However, when looking at the drivers of the HMI we can see a different picture. The Dutch housing market can still be characterised as a seller’s market. Housing prices are in some regions flattening off but the prices in general are rising faster than the long-term average inflation rate.

This situation is influenced by high demand and low supply caused by historic low mortgage rate, low construction numbers, a favourable economic situation, etc.  The Nitrogen Crisis, which is a result of not meeting the European regulatory requirements on this matter, leads to even more pressure on the supply.

On the other hand, there are some signs of the housing market moving into a lower gear. Homes are sitting on the market for a longer period. The economic growth is slowing down. And despite the fact consumer confidence hardly changed, the overall opinion of the Dutch consumer on the economic climate as well as their willingness to buy have deteriorated slightly. It is not sure how these developments will evolve but domestic economic risks have become more prominent.

Another important factor which will be of influence is climate change. The built environment has a major impact on greenhouse gas emissions and the changing climate. The attention of Dutch institutional investors on this matter is reflected in the GRESB score of 7.6 of all Dutch non-listed residential funds. At the same time, the overall developments in the Netherlands on sustainability issues remain limited and will need to be speeded up in the coming years if the country is to achieve its climate goals.