The Dutch housing market
Rabo Real Estate Group has had to contend with very difficult market conditions for several
years now.The recession in the Netherlands, which continued until the summer of 2013, adversely
affected the real estate market. Consumers were hit by rising unemployment and falling
purchasing power, investments by business and industry were down and exports slowed.
Few existing homes were sold and new-build activities slowed. The economy has picked up
slightly since the fourth quarter of 2013. The Dutch housing market appears to have bottomed
out and the affordability of housing has improved. The recovery is still subdued however
because many homeowners are failing to move up the housing ladder, as their mortgages are
higher than the value of their property. Moreover the borrowing capacity of first-time buyers in
the housing market has been curtailed by tighter regulations. Overall, these developments did
not yet lead to a significant improvement of market conditions, and 2013 was therefore a very
challenging year for Rabo Real Estate Group.
The prices of owner-occupied housing in the Netherlands have fallen by around 20% on average
in the past five years. The government has carried out reforms
designed to revitalise the housing market over time; as of 1 January
2013 new mortgages are required to be repaid in full within 30 years
to be eligible for mortgage interest relief. This entails higher
monthly housing expenses and a lower borrowing capacity for
customers for new mortgages. This depressed prices in the near
term, especially in the market for first-time buyers. But the longer-
term outlook has been improved by these measures. The price
decreases benefit the affordability of existing owner-occupied
housing, as do the low mortgage interest rates and the lower
transfer tax. Transaction numbers increased in the second half of
2013 and the residential property price decreases are expected to
end in the course of 2014.
Bouwfonds Property Development
Bouwfonds Property Development, which operates as Bouwfonds Ontwikkeling in the
Netherlands, develops complete residential areas in the Netherlands, France and Germany.
The regional branches of Bouwfonds Ontwikkeling collaborate with Rabobank Nederland and
the local Rabobanks in the sale of new-build developments, area development or rejuvenation,
and campaigns to give an impulse to local housing markets. Bouwfonds Ontwikkeling carried
out only 2,160 (2,739) residential property transactions in the Netherlands in 2013, which can
be considered a historical low. This led to an adjustment of future prospects for residential
property developments, and entailed significant write-downs on strategic land holdings and
substantial revaluations of land operations. The French market for investment rental property
has deteriorated, and the number of transactions has fallen as a result. The German housing
market remained strong, but even so the number of residential property transactions fell by 7%
as fewer contracts were won. Bouwfonds Property Development sold a total of 5,169 (6,312)
residential properties in 2013.
Netherlands
France
Germany
Other
90 Annual Report 2013 Rabobank Group
