Real estate investors in the Netherlands have again called on the Dutch government to create a stable investment climate for foreign capital, which they say is essential to beat the shortage of rental housing.
The government has set a target of building 100,000 new homes a year but, Dutch investors warn, without international investors, it will be impossible to meet the goal.
Speaking at the Provada real estate fair in Amsterdam on Thursday, Robert-Jan Foortse, head of European property investments at pension investment company APG, said the Dutch economy was in good shape but current housing policy makes it “too difficult” for investors.
“They’ve not stopped investing in residential property,” he said. “They just don’t invest in the Netherlands any more.”
Between 2018 and 2022, foreign investors were responsible for funding some 4,700 homes a year in the Netherlands but this has now dropped to around 500, according to new research by Capital Value.
Successive Dutch governments have all tinkered with housing policy, making it impossible for foreign investors such as pension funds to gain the stability they need to make long-term investments, Foortse said.
Trust and consistency, he said, are crucial to bringing back long-term participation. “Being slightly attractive,” he said, “is not enough.”
Mark Siezen, chief executive of pension investment group Bouwinvest, said the government does now appear to understand that action needs to be taken, and that he is positive new measures will be announced in September when the housing ministry publishes its annual spending plans.
“There is a clear realisation that things need to change,” he said. Nevertheless, he warned, that even if the government comes up with answers to the housing challenge, it may still be difficult to get majority support in parliament and in the senate.
The main problem, he said, is that foreign pension funds are not able to benefit from the same tax regime as Dutch ones, which are exempt from 25% corporation tax. Nevertheless, he said, changing that would be easy to implement.
Quick wins
In addition, cutting the property transfer tax rate — currently 8% — would also be a quick win, he said. That tax rate has already been reduced from 10.5% and a further cut to 7% is planned for next year.
It is the first time that Provada, a three-day event covering all aspects of real estate, has held a day focused on international investors.
CBRE Investment Management’s research chief David Inskip said there are lots of positives in the Dutch market, but that investors need more clarity. “There need to be some changes in the next few months, but beyond that we need stability,” he said.
