Projections for economic growth have been revised upwards by several authorities.
For example, the IMF expects the European economy to grow by 0.7% in 2023, despite the war between Russia and Ukraine. This is due in part to the fact that energy costs have proved to be less high than expected.
This will particularly benefit companies that have suffered most from the higher energy costs.
Consequently, the influence of this accumulation of costs, which was visible last year, is diminishing and ultimately fewer companies will find themselves in difficulties. This will in any event ensure that the fall in demand for commercial property caused by this accumulation of cost increases will be limited.
Savills expects long-term trends in particular will continue to determine how supply and demand ratios for commercial property evolve. One example is a shift in demand due to a preference for high-quality office space in prime locations.
This means that investors will have less worries about a drop in demand and risks to current cash flows. However, acquisitions and sales prompted by a further rise in deposit rates by the ECB will again have consequences for the total volume of investment in Dutch property. This volume will be limited until such time as a new price equilibrium is reached. This will most likely occur in 2023 H2.
"Savills expects uncertainty about the ECB's interest rate outlook and the impact of regulations on investment and development markets to affect Dutch real estate investment the most in 2023."
Sources Statistics Netherlands, CPB Netherlands Bureau for Economic Policy Analysis, De Nederlandsche Bank, ABN AMRO
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