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Keypoints

  • Traditional safe havens under pressure due to uncertainty
  • Global pressure, but the Dutch economy stays on course
  • Dutch core real estate offers certainty, driven by structural demand and societal relevance
  • Despite potential market corrections, the Dutch real estate market remains attractive and stable

Uncertainty drives investors towards safe havens

In times of geopolitical tensions and economic uncertainty, investors traditionally seek refuge in safe havens such as government bonds, gold, and the US dollar. However, since the recent 'Liberation Day,' even the dollar is under pressure. The unpredictable trade policies of Trump, the undermining of the Federal Reserve's independence, concerns over the US debt position, and a weakening economy are eroding the status of the dollar as the ultimate safe haven. This paves the way for alternative assets, with direct real estate playing a role.

Inflation effects manageable for the Netherlands

The increasing protectionism under President Trump is heightening global economic uncertainty and leading to significant short-term fluctuations in the financial markets. The recent trade war, marked by tariffs on EU goods, is putting additional pressure on the world economy. The impact on the European Union remains unclear for now, partly because many of these tariffs will only come into effect after the summer. However, it is evident that the confidence of businesses, consumers, and investors is diminishing as a result. This uncertainty is clearly reflected in the bond markets. For example, the 10-year yield on Dutch government bonds rose to 3 percent in March, largely due to increased German government investments. Later, this yield dropped back to 2.7 percent, with expectations that this downward trend will continue towards the end of the year. These developments have a direct impact on mortgage rates, which are closely linked to movements in capital market yields.

Although inflation in the Netherlands stood at 4.1 percent in March, inflation in the eurozone has since dropped to 2.2 percent. Furthermore, the inflationary impact of the trade war seems to be limited for now. China could potentially sell products originally intended for the American market at lower prices in Europe, provided the EU does not intervene with anti-dumping measures. Additionally, falling energy prices and a weaker dollar are reducing import inflation.

In this context, it is likely that the European Central Bank (ECB) will continue its policy of interest rate cuts. The deposit rate has now been lowered for the seventh time in a row and is still above the neutral level of 1.5 percent. Further cuts remain likely as long as economic growth remains subdued. This creates room for lower mortgage rates, both for short and long fixed-rate periods. For property investors, this means a more attractive financing environment, which could benefit property valuations.

While geopolitical tensions and US trade policy are currently causing volatility, the long-term outlook for the Dutch property market remains positive. The Netherlands benefits from strong institutions, relatively low government debt, and a favourable position within the European economy. Structural scarcity in property, combined with declining interest rates, increases the appeal of property as a stable and value-preserving investment. Even in an uncertain macroeconomic environment, property remains a solid investment choice.

Core real estate as an attractive alternative

In a world increasingly characterized by geopolitical instability, escalating trade conflicts, and retreating international cooperation, investors are seeking solid ground. Financial markets are difficult to predict, and policy seems more unpredictable than ever. In this climate, it is not surprising that attention is shifting towards investment forms that combine stability and predictability with societal support. Core real estate – high-quality property in stable economies – fits this need perfectly.

The Netherlands, in this regard, presents a particularly attractive market. The combination of a reliable legal infrastructure, a healthy economy, and demographic trends such as an aging population and ongoing housing pressure ensures that demand for quality real estate remains structurally high. In particular, residential and healthcare real estate benefit from this. The pressure on the housing market is not temporary, but the result of years of underproduction and rising demand. At the same time, an aging population requires appropriate care facilities that are both functional and future-proof. This type of real estate offers investors stable rental income with relatively low vacancy rates, in sectors that combine societal urgency with financial returns.

In this context, residential real estate remains the cornerstone of the Dutch property landscape. The segment was the best performer in 2024 within the broader real estate market, accounting for approximately 60% of the total return. The strong performance is driven by structural factors such as ongoing scarcity, real wage increases, and a robust labour market. Economic growth is improving, wage growth remains positive, and housing supply is still limited. It is expected that this momentum will continue into 2025, with market rents growing well above inflation (source: Oxford Economics). However, some flattening may occur due to increasing uncertainty, rising long-term interest rates, and a slight increase in unemployment.

Although the government is pursuing ambitious construction goals, these are unlikely to be realized in the short term due to bottlenecks in permit processes and construction capacity. At the same time, regulations such as the Affordable Rent Act are putting pressure on direct returns due to limitations on rent increases. However, this limitation does little to undermine the underlying investment story: stable cash flows, low vacancy rates, and clear societal relevance make residential investments attractive to those seeking security in uncertain times. Additionally, retail real estate is showing signs of life once again. After years of underperformance, economic stabilization and purchasing power growth are now driving a recovery. Falling inflation is increasing household spending power, which directly impacts retail. At the same time, the recovery of international tourism – with Amsterdam as a major attraction – is making the demand for retail space in prime locations relevant again. This results in a return of rental growth, albeit moderate, and a cautious recovery of capital values after years of pressure.

International comparison of total real estate returns 2024 (all assets, local currency)

Source: MSCI (2025)

International comparison of cumulative property value growth 2024 - 2029 (all assets)

Source: Oxford Economics (2025)

Dutch real estate demonstrates resilience towards the future

What further strengthens the position of the Netherlands in the real estate market is its remarkable resilience in a market correction scenario. In the growth forecast by Oxford Economics, this is the most impactful scenario, characterised by a sudden rise in government bond yields. This exerts direct pressure on the borrowing capacity of households and investors, potentially having wide-ranging consequences for property valuations.

Precisely in this interest rate-sensitive climate, the expected growth in the Netherlands remains robust. While significant slowdowns are visible elsewhere, the Dutch market shows only a slight slowdown compared to the baseline scenario. This resilience under deteriorating conditions underscores the fundamental confidence in the Dutch real estate market and reinforces the perception of real estate – particularly residential and healthcare properties – as a structurally safe haven. Given the current geopolitical and economic uncertainty, we believe these qualities will only become more important in the coming years for investors seeking predictability, cash flow, and value-stable assets.

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