private market remains to us an attractive source of complementary
finance.
We will not fail to mention in this report that in October 1979 there was
an issue of 25 million 83A% Euronotes FGH 1979 per 1983/86. With it
we responded to the greater flexibility of the foreign exchange policy of
De Nederlandsche Bank, which allows application of the guilder amounts
attracted in this form in the Netherlands.
During the year under review we were in the market with five types of
mortgage bonds with interest rates varying from 8y2% to 10%.
Active finance
In 1979 the housing market showed a far from rosy picture. On the one
hand, as a result of the strong winter the number of houses completed
dropped by about 20% as compared with 1978, on the other hand, a
decline in demand must be established. Clearly apparent causes for the
latter are the gloomy picture of the future in respect of employment and
growth in income, the price rises and relatively high capital interest rates.
It makes a strange impression when in such a market picture the
government, an advocate of the promotion of private home ownership
for many years, creates and perpetuates uncertainty as to the
deductibility of interest for income tax purposes.
We have argued many a time that housing scarcity should partly be
solved by promoting through-flow. This will make good and cheaper
houses available for people in the lower income brackets. It is
inadmissible that budgetary considerations should dislocate the housing
market for a longer time, resulting in a decrease or even abolition of the
above-mentioned deductibility. For the result is not only a stagnation
on the market for private dwellings, but also a strongly increasing
demand for rented houses. And in this very sector it is increasingly
difficult for the government to give suitable answers to the problems
for budgetary reasons.
If government and parliament were to take a clear position with regard
to the continued deductibility of interest at short notice, a slow recovery
of the housing market in the course of 1980 may be possible.
There is still a great interest in the purchase of private homes in the
Netherlands. In view of the progressive decrease in the size of families
the accent will shift to the smaller dwellings and appartments.
The market for industrial buildings showed a slightly more favourable
picture in 1979. Notably in the big cities the demand for modern, well
equiped office units stayed at a fair level. Good accessibility and
parking-space are of decisive importance in this respect.
The market of industrial halls also saw a revival in demand. In this regard
a shift from lease to purchase can be noticed under the influence of the
rules of the W.I.R. These developments were reflected in an increase in
the demand for mortgage credit from this sector.
During the year under review investments in industrial buildings were
slightly above the 1978 level (3,5%). It is difficult to make forecasts about
the developments of this market segment in 1980 as a result of the many
economic and political uncertainties that may have a direct effect on
entrepreneurial behaviour.
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