7.3

Housing Market Indicator

overall score, actual per Q1 2019

Housing Market Indicator

There is no doubt about the attractiveness of the Dutch housing market. Driven by the continued scarcity of homes and a strong economy, the housing market reaching new record highs. However, the longer this situation lasts, the more it is a question if, or more likely when the market will bottom out to more normal levels. We cannot answer that question right now, but there are signs that could indicate that the housing market is indeed cooling down. This is reflected in the latest score of The Housing Market Indicator, which dropped to 7.3 in Q1 (Q3 2018: 7.9). It is too early to say whether this signals the start of a more structural change from the trend seen over the past few years.

The economic and housing market drivers are still very positive. This is primarily driven by economic growth, low unemployment and above-average house price developments. At the same time, both economic growth and house price increases are levelling off and inflation climbed to a fairly high 2.8% in Q1 2019.

The drivers on the consumer side are most notable. Customer satisfaction is still reasonable but affordability is under pressure and in Q1 Dutch consumer confidence declined to -4, the lowest level since 2015.

On the sustainability side of residential investments, it is quite clear that the attention institutional investors are giving to sustainability is now paying off. The GRESB score of all Dutch non-listed residential funds increased to 7.7. At the same time, the overall developments in the Netherlands on this front remain limited and will need to be speeded up in the coming years if the country is to achieve its climate goals.