7.9

Housing Market Indicator

overall score, actual per Q3 2018

Housing Market Indicator

In 2018, we have learned to expect the unexpected, whether it be politics, weather or housing. While some experts expected the Dutch housing market to cool down in 2018, the market actually heated up. Driven by growing scarcity and a strong economy, the housing market reached new record highs. This upturn is reflected in The Housing Market Indicator*, which rose to a level of 7.9 in Q3 (Q1: 7.6).

The index is mainly driven by economic developments and the situation on the housing market. Solid economic growth, low unemployment numbers and especially above-average price developments are the main drivers.

On the consumer side, we can see the downside of price developments, given the reduced affordability of housing in the Netherlands. There is an increasing number of households running out of housing options in the larger cities. This applies particularly to households in the lower part of the middle-income class.

Another area of concern is sustainability. Albeit the score is a reasonable 6.5, developments in the Netherlands on this matter remain limited. It is true that the share of 'green' energy that we use is increasing, the pace at which this is happening is still low. We wonder whether the measures taken by the government, large companies and the consumer will be sufficient to trigger the necessary acceleration. However, sustainability is high on the list of priorities among residential investment managers. This is reflected in the higher overall GRESB score of all Dutch non-listed residential funds.