Foreign parties invest in new residential developments
The activity of investors in the residential market continues to be on a high level. Especially investments in new residential developments have increased over the past two quarters. This can be explained by the current shortage on the residential market and the quest for assets to invest in. The CBRE Residential MarketView states that in the 2nd and 3rd quarter of 2015 a volume of € 774 million was invested in new developments, approximately 68.3% of the total volume.
Foreign investors enter new residential market
The interest of investors in new housing developments is striking. The investment volume for newly constructed rental housing is now higher than investments in existing properties. During the last two quarters foreign parties also made their entry in this market. Furthermore we see that investors - in their search for new residential properties - now also become active in areas where previously only social housing corporations invested.
Further recovery in the owner-occupier market is most notable in the large cities in the north wing of the Randstad. The price growth in these cities runs further ahead of some rural areas and more peripheral regions. As such, on an annual basis house prices in Amsterdam and Utrecht increased in the third quarter of 2015 by 9.9% and 7.3% respectively.
Outlook
CBRE expects investors to fill the gap that social housing corporations leave behind. They will invest in new residential developments in neighbourhoods that are currently dominated by social housing corporations. National and international investors are expected to continue to invest in newly developed residential rental houses. In their quest for return on investment, investors are likely to target niche residential assets for students and young professionals.
CBRE Group, Inc. (NYSE:CBRE), a Fortune 500 and S&P 500 company headquartered in Los Angeles, is the world’s largest commercial real estate services and investment firm (based on 2019 revenue). The company has more than 100,000 employees (excluding affiliates) and serves real estate investors and occupiers through more than 530 offices (excluding affiliates) worldwide. CBRE offers a broad range of integrated services, including facilities, transaction and project management; property management; investment management; appraisal and valuation; property leasing; strategic consulting; property sales; mortgage services and development services. Please visit our website at www.cbre.com.