Massive Foreign Interest in Properties in the Netherlands

Massive Foreign Interest in Properties in the Netherlands

 If you’re looking to sell property in the Netherlands fast, no doubt encouraged by the rising property prices, you won’t mind Brexit too much. Because while there has been no immediate effect of the Brexit referendum on the property market in the Netherlands, there’s no question that Britain’s decision to leave the EU has encouraged more London-based businesses to look at Amsterdam as an option.

Property prices in the Netherlands have been on the up and every week or so, one hears news of major real estate deals. For example, back in June 2016, major property deals worth $2.2 billion were struck in Amsterdam, mostly by large foreign private equity companies.

Foreign money accounts for 52 percent of the property investment in the Netherlands, up from 22 percent in 2012.  This is much higher than what’s seen in Britain, France and Germany.

 Jeroen Jansen, a researcher at the property consultancy group Savills says, "That's very steep growth and very much supports the trend that demand is far outstripping supply of basically any investment proposition."  

Jaap Sellen, a fund manager at CBRE Global Investors adds, "There is a lot of buying by foreign players. They are hitting the whole market."

Who is investing in the Netherlands? Germans are the biggest investors in the housing market in Holland, with British and American property buyers not far behind. Indeed, 36% of the property investment Netherlands from 2014 to 2016 has been attributed to British and American buyers.

Investors in Holland have been pouring in money into all property classes, including on those that suffered a meltdown following the 2008 global economic recession. Even generally conservative pension funds have been investing heavily in the housing market in the Netherlands. It has certainly helped that interest rates are at their lowest than they have been for years.

Asian investors have been putting a lot of money as well, especially rich, high net worth individuals from the Chinese mainland and Hong Kong. This has certainly pushed up property prices considerably.

 Sven Bertens, who heads the research team at JLL in the Netherlands said, "Amsterdam is not really cheap anymore after steep price rises. But, he added, "It is a market with a relatively low risk and a yield that is still attractive." 

In fact, the pace of the recovery has taken many market observers by surprise, with many worrying about overheating of the property market. There are commercial properties that are selling up thrice the price they were bought for during the 2008-09 financial crises.

This has forced many private equity firms to sell off their portfolios. As Jaap Rhijn of the U.S. based real estate services group Colliers says, "You have some clear signals that you must be careful in what you do. This is the moment that some private equity investors are selling."

Certainly, people with properties for sale in the Netherlands are performing a tight rope walk. Nobody really knows how much further the market can go before the inevitable slowdown.

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