Living

The living sector showed a remarkable recovery in 2024 compared to the previous year. Investment volume rose by a whopping 99%, reaching €4.1 billion. By comparison, in 2023 it was €2.1 billion. This increase offers hope, although we should add a disclaimer. A significant part, in fact, consisted of investments with a privatisation strategy. On the other hand, Dutch core capital was again more active in the new-build market, resulting in a volume of €2 billion there. Although they are excluded from the total residential investment volume, housing corporations built and bought more mid-rent homes. For 2025, we expect a further increase in activity, mainly focused on new construction and existing operational living.

Trends and developments

• Despite the increase in investments in new development projects in 2024, this is still mainly from investors with Dutch impact and core capital. They have a strong preference for fully ESG-compliant residential complexes, where the emphasis is on sustainable and affordable housing. Foreign investors hardly bought any new development projects in 2024. While in the previous seven years, they acquired an average of 32% of new-build projects annually.
• CBRE expects a further increase in the volume of new-build investments in the coming years, particularly from Dutch capital. Some Dutch pension funds still experience limited opportunities for a larger allocation to residential real estate. At the same time, more space is also emerging at Dutch institutions, often driven by separate accounts. Open-ended core funds of some parties also have some allocation needs again.
• There is growing interest in operational real estate, including student housing. This interest is due to strong fundamentals for student housing and serviced living. In addition, these operational platforms can be easily expanded and optimised. CBRE expects a further increase in activity in 2025. This is because more and more of these types of investment opportunities are becoming available in the Netherlands. There is also an increasing inflow of both Dutch and international capital into this type of residential real estate.
• In 2025, the privatisation strategy will remain dominant within existing properties. The supply of complexes and portfolios is large, and new parties are increasingly interested – including Dutch family offices and private equity. The expected increase in vacant values still guarantees significant returns over capital values for the coming years. However, the entry of new parties will eventually lead to higher pressure on the vacancy value ratio in bids, especially for energy-efficient properties with high mutation rates. We expect the reduction in transfer tax in 2026 to lead to higher investment volume in the first half of the year, followed by a slight dip until the new year.

Foreign investor stays away

The increased tax and regulatory pressure have significantly reduced the attractiveness of Dutch living investments for foreign investors in recent years. This is particularly unfavourable, given the growing availability of capital for living investment within Europe. Despite the considerable investment need in the Netherlands to tackle both the surge of selling-off rental homes and the general housing shortages, the country is increasingly lagging in attracting new foreign capital.

This year, it also turned out that the foreign capital flowing to the Netherlands is mainly invested in privatisation portfolios. This contrasts with other European countries, where the homes are purchased with a long-term rental strategy. As a result, the Dutch new-build task and the operation of rental housing are increasingly resting on Dutch investors and the relatively limited Dutch capital.