The Netherlands Economy and Real Estate Market
Facts about the Netherlands
For any country to thrive economically, the citizens need to have disposable income. A country cannot prosper economically when earning and spending opportunities are limited. In this regard, the Netherlands thrives significantly on various economic aspects that include e-commerce (J.P. Morgan). As a result, flourishing in various industries translates to the continuous and stable flow of money. The real estate market in the Netherlands has been made favorable by multiple factors, such as its stable GDP and open trade regulations. Economic stability plays a significant role in the overall well being of the Netherlands citizens. Despite having a relatively low population, the country is highly economically independent. Therefore, it is not surprising that the country features in the top list of happiest countries worldwide.
Credit Rating
The credit rating for the country stands at AAA, thus translating to economic stability (“Netherlands – Credit Rating”). The real estate market, therefore, attracts foreign investors due to the friendly economic status of the country. Investor opportunities play a significant role in the overall economic growth of the country. The favorable business environment attracts a considerable number of foreign investors. Foreign investment improves the financial status of a nation. It is therefore not surprising that a stable credit rating, which is indicative of financial stability plays a role in attracting foreign investment in the Netherlands.
Brokerage Houses
The real estate market plays a significant role in the economic structure of the country. Colliers, C&W, and CBRE are all brokerage houses in the Netherlands, facilitating sale and occupancy of real estate private and commercial property. The Netherlands has a favorable real estate market, which makes the real estate market lucrative. The uptake of retail space translates to a need for brokerage services. Brokerage services are equally required in the selling and purchase of a private property.
Inflation and GDP Growth
The Netherlands has had stable growth in 2019 with anticipated stability in 2020. Inflation and unemployment rates are equally low compared to other European countries. The GDP growth rate is steady as a result of positive consumer habits across different economic spectrums. This positive factor increases the attractiveness of the Netherlands regarding investor opportunities in the real estate market. It is essential to note the GDP of a country dramatically affects its financial stability. High inflation and low growth hamper economic growth efforts such as those in the real estate market.
Doing Business
A stable flow of money makes it possible for people to make purchases. Other aspects, such as favorable tax laws, as well as technology and innovation opportunities, make it possible for the real estate market to thrive (PWC). Investor confidence is equally boosted by stable GDP growth, stable credit rating as well as a low inflation rate. The low unemployment rate translates to decreased human resources. It ultimately results in high reliance on foreign workforce. Foreign investment is thus rampant, making it favorable for foreign investors.
Report on the Local Real Estate Market
Industrial space, for example, increased in 2019 as compared to the previous year. It is, however, interesting to note that office space take-up was lower as compared to the previous year (Van Der Sluys). Shopping centers have been significantly impacted by the uptake of eCommerce in the country. However, not all businesses have been rendered obsolete in terms of physical workspaces. These include salons and ice cream shops. Even though there has been less need for physical space, the two industries have had a significant boom, thereby positively impacting the real estate market in the Netherlands (Rosian and Pustjens). Don't use plagiarised sources.Get your custom essay just from $11/page
Public Real Estate Companies
Wereldhave, Eurocommercial properties, and Unibail-Rodamco are the largest real estate companies in the Netherlands. All three companies have had financial growth indicating stability. The euro commercial stock price, for example, recently saw a 3% increase (“Financial: Eurocommercial Shopping Centres”, 2019). Unibail-Ramco equally reported a 26% turnover increase (“Financial information as at September 30, 2019”, 2019). Wereldhave dividend price of 2.5euros (“Press Release Results First Half 2019”, 2019) remained unchanged indicative of stability. The three companies have portfolios that include private property as well as commercial property.
Real Estate Developers
The real estate market is not complete without developers. Such include some of the most significant development companies such as Royal BAM Group, VolkerWessels, and TBI. Each of the companies recorded revenues worth € 6.6, 5.7, and 1.7 billion, respectively, in 2017 (Kamer). The fact that a high number of borrowing is in the mortgage sector is an indication of the real estate status. The figures are indicative of a robust real estate market in the country. The developers mentioned above have portfolios that extend to other European countries. It, therefore, means that these developers have high turnovers making them financially stable.
Commercial Lenders
Lending is a significant aspect in the real market. Banking institutions such as Rabobank ABN Amro and ING impact the real estate market in the country. For instance, the ABN Amro Bank has half of its loans originating from the real estate sector. Additionally, low-interest rates have had an impact on mortgage loan uptake. As a result, the risk factor has been deemed relatively higher than is paid attention to (Kooren).
Works Cited
Financial: Eurocommercial Shopping Centres. (2019). Retrieved 12 February 2020, from
https://www.eurocommercialproperties.com/financial
Financial information as at September 30, 2019. (2019). Retrieved 12 February 2020, from
https://images-urw.azureedge.net/-/media/Corporate~o~Sites/Unibail-Rodamco-Corporate/Files/Homepage/INVESTORS/Press-Releases/Financial-Information/EN/20191018-Financial-Information-as-at-September-30-2019_onlyEN.ashx?revision=0edfb48a-e17a-4a68-84e4-a05c3804ce6a
J.P. Morgan. “2019 Global Payments Trends Report – Netherlands Country
Insights”. Jpmorgan.Com,2019, https://www.jpmorgan.com/merchant-services/insights/reports/netherlands. Accessed 10 February 2020.
Kamer, Lars. “Netherlands: Biggest Construction Companies Based On Revenue 2017 |
Statista”. Statista, 2020, https://www.statista.com/statistics/968572/largest-construction-companies-based-on-revenue-in-the-netherlands/. Accessed 10 February 2020.
Kooren, Michael. “Dutch Central Bank: Banks Must Hold 3 Billion Euros Extra Capital For
Mortgages”. U.S., 2013, https://www.reuters.com/article/us-netherlands-cenbank/dutch-central-bank-banks-must-hold-3-billion-euros-extra-capital-for-mortgages-idUSKBN1WU0F3. Accessed 10 February 2020.
“Netherlands – Credit Rating”. Tradingeconomics.Com, 2020,
https://tradingeconomics.com/netherlands/rating. Accessed 10 February 2020.
Press Release Results First Half 2019. (2019). Retrieved 12 February 2020, from
https://www.wereldhave.com/siteassets/coporate-press–updates/2019/press-release-h1-2019.pdf
PWC. “Doing Business in the Netherlands 2020 – Tax – PWC Netherlands”. PWC, 2020,
https://www.pwc.nl/en/insights-and-publications/services-and-industries/tax/doing-business-in-the-netherlands.html. Accessed 10 February 2020.
Rosian, Alexandra, and Martijn Pustjens. “Colliers International | District Shopping Center
Successful Despite E-Commerce”. Www2.Colliers.Com, 2020, https://www2.colliers.com/en-NL/Research/EN20200118Districtshoppingcenters. Accessed 10 February 2020.
Van Der Sluys, Frank. “Netherlands Marketbeat | Netherlands | Related Services”. Related
Services, 2019, https://www.cushmanwakefield.com/en/netherlands/insights/netherlands-marketbeat. Accessed 10 February 2020.