Record investment volume in Dutch new-build rental homes, more than €3 billion unused due to lack of supply
16 december 2021
The investment volume in new-build rental homes rose to a record height in 2021. An analysis conducted by Capital Value shows that the volume of new-build rental homes acquired by Dutch and international investors is expected to total €4.8 billion. This amounts to a growth of 8.9% compared to the previous year, in which the investments in new-build rental homes amounted to €4.4 billion. The investments in 2021 will enable the addition of 16,700 rental homes to the housing stock. Research by Capital Value shows that the number of new rental homes could have been much higher, but that €3 billion was not invested because of a lack of supply. This amount could have been used to realise an additional 11,000 rental homes.
Total residential investment market transaction volume of €7.7 billion significantly lower than 2020
The transaction volume in 2021 is expected to total €7.7 billion, a reduction of 32.5% relative to the transaction volume in 2020. This reduction is primarily attributable to the transfer tax raise from 2% to 8% as of 1 January 2021. Because of this, many investors chose to move their sales originally scheduled for 2021 forward to December 2020. Expectations are that in 2022 investors will seek to sell more existing property to rejuvenate their portfolios and increase their portfolios' sustainability.
Much capital for new build remains unused
An analysis conducted by Capital Value shows that the amount of capital that Dutch and international investors have available for new-build homes is in fact much higher than the 2021 total investment volume. At least €3.2 billion of available capital could not be invested in new-build homes in 2021. This represents a significant missed opportunity, as these funds would go a long way towards reducing the housing shortage in the Netherlands.
Marijn Snijders, director of Capital Value: "We have now seen for many years that the number of building permits falls far short of the required housing production level. Investors have a large amount of capital available to invest in new, affordable residential homes. It is therefore important not to let this opportunity to reduce the housing shortage slip by. We need to accelerate spatial planning procedures, so that pension funds and housing associations can rapidly build more high-quality rental homes. For this to be possible, it is essential to prevent regulations from stacking up at the national and local levels. The fact that the landlord levy is being abolished is good news, because this will give housing associations far more freedom to invest in the construction of new regulated rental homes. In the coming years, investors and associations should strive to increase the housing stock by more than 25,000 new rental homes per year."
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