According to international real estate advisor Savills, the increasing regulation of the Dutch housing market is not unique to the Netherlands. The same trend can be seen in other European countries in an attempt to prevent rents and house prices from rising rapidly.
Since the end of last year, rent price increases in Ireland have been capped in so-called 'Rent Pressure Zones' (RPZs). Similar measures have already been introduced in France. All across Europe, governments are considering policies to keep homes affordable. For investors, this means that they cannot anticipate future regulatory changes yet it is also a clear signal that the fundamentals of the housing market are still strong.
Bas Wilberts, Head of Residential & Hotel Investment at Savills in the Netherlands, says: "As increasing regulation is a broader, international trend, the Netherlands will maintain its competitive position as the underlying fundamentals of the market remain robust. We should not forget that regulation indirectly provides more security for investors: restricting rental growth simultaneously reduces the risk of relocation due to affordability issues. By expanding rent controls to cover more properties by 2024, the Dutch housing market will increasingly become the domain of 'core' investors."
These 'core' investors will most likely look for limited risks and sufficient returns. For investors who continue to focus on non-regulated properties, locations with strong fundamentals such as high demand for living space, product availability, the attractiveness of the neighbourhood and the strength of an area's economy, will continue to be interesting. A data-driven analysis using the Savills Market Indicator shows that large regional Dutch cities such as Arnhem, Breda and Nijmegen can be attractive investment locations, as an alternative to the Randstad (Amsterdam, Rotterdam, Utrecht and The Hague). There is less competition there, while there are strong fundamentals for the local (rental) housing market.
Raymond Frederiks, Senior Research Consultant at Savills in the Netherlands, adds: "Due to increasing regulation, the search for investment opportunities with the desired risk/return profile is becoming more sophisticated. This requires a broader view and data-driven analyses, especially in the current tight market."