RESIDENTIAL

Keypoints

  • Investment volumes significantly higher due to deferred transactions related to transfer tax
  • Initial yields remain stable and the interest rate effect is still limited
  • Market rents continue to rise strongly, with shortages sustaining high rental growth
  • House prices are levelling off, with the NVM reporting a quarter-on-quarter decline and fewer transactions
  • Vacancy rates remain very low, and the shortage in the rental market persists
  • Construction costs are rising sharply due to higher wages, with material costs also expected to increase

Strong start of investment market

The investment volume for Dutch rental housing reached €1.8 billion in the first quarter of 2026. This is more than three times the level recorded in the first quarter of 2025 and the highest first-quarter volume since 2022. The reduction in transfer tax as of 1 January 2026 led to several transactions being postponed until the start of this year, thereby increasing investment volumes. As in 2025, institutional investors—primarily involved in new-build transactions—and private investors, often pursuing a sell-off strategy, accounted for a large share of investment activity in the first quarter of 2026. The activity of foreign investors remained limited, once again due to the unattractive tax environment for international investors in the Netherlands.

INVESTMENT VOLUMES (IN BILLIONS € )

Source: C&W (2026), RCA (2026), edited by Achmea Real Estate

No impact of rising interest rates on initial yields yet

Capital market interest rates have increased somewhat due to the geopolitical situation, but remain at the upper end of the range of approximately 2.5% to 3% within which they have been since the end of 2022. For now, the Iran conflict therefore does not appear to have had an impact on initial yields. Depending on geopolitical developments, this could change in the coming quarters. Gross initial yields did, however, decline slightly due to the lower transfer tax.

SPREAD AND GIY

Source: Oxford Economics, C&W & MSCI (2026), edited by Achmea Real Estate

Forecasts indicate that the shortage will persist

Vacancy rates for rental housing owned by institutional investors increased slightly, but remain very low at 1.4%. The shortage in the rental market remains significant, partly due to a decline in rental stock as a result of sales by private investors. Market rental growth eased slightly, but remains very high at around 8% year-on-year. Shortages and strong rental growth are expected to persist.

House prices are barely increasing anymore

House prices are expected to have risen again in the first quarter. Based on preliminary estimates, they increased by 0.9%. On an annual basis, the rise amounted to more than 5%. The impact of the mortgage rate increases in March is not yet reflected in these figures. Major banks expect house price growth to slow in 2026 compared to previous years, but to remain positive as higher incomes offset higher interest rates. According to figures from the NVM, the average transaction price of existing homes is €485,000, which is 2.7% lower than in the previous quarter. Although price declines at the start of the year are common, this decrease is more pronounced than usual. On an annual basis, there is still a modest increase of approximately €10,000. Around 34,600 homes were sold in the first quarter, more than a quarter fewer than in the previous quarter. Buyers are taking more time to make decisions, and supply is increasing. The tightness indicator rose from 1.9 to 2.6. The Eigen Huis Market Indicator remains slightly negative. In December, the index stood at 95 points, broadly in line with previous months but below the 97 points recorded in March 2025. Geopolitical uncertainty does not yet appear to be affecting buyer confidence.

PRICEINDEX (2015=100)

Source: Oxford Economics, Kadaster, MSCI (2026), edited by Achmea Real Estate

Wage growth is driving higher construction costs

Construction costs continued to rise at the start of 2026. In February, input prices for new-build homes were more than 2% higher than at the end of 2025, driven by wage indexation in various construction-related collective labour agreements. Compared with a year earlier, construction costs were 5.2% higher. Labour costs in particular have increased significantly, reflecting the pass-through of high inflation in 2023. Material costs were 3.4% higher than a year earlier and are expected to rise further due to higher energy prices and transport costs.

PRICEINDEX CONSTRUCTION COSTS (2021=100)

Source: CBS (2026), edited by Achmea Real Estate

Outlook

The investment market is expected to remain strong in 2026, with volumes comparable to 2025. Institutional interest in new-build developments is expected to persist, as is interest from investors pursuing sell-off strategies in existing stock. Rising risk-free rates make further yield compression unlikely and may lead to an upward correction. Inflation is expected to exceed 3% in 2026, resulting in higher construction costs. The rental market will remain robust due to ongoing shortages. In the owner-occupied market, early signs of cooling are emerging, and the period of strong price increases appears to be coming to an end.

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