AMVEST HOUSEVIEW

Healthcare care market

Aging population outpaces senior housing supply and workforce capacity

• In the coming years, the number and proportion of seniors will continue to increase substantially. Additionally, the average age of seniors continues to rise.

• Senior housing development continues to lag significantly behind targets, with new-build construction plateauing at around 3,000 units compared to an annual goal of 36,000. In 2025 the addition of care homes increased by only 1,215 units compared to 2024.

• Municipalities and housing corporations are increasingly focusing on transitioning seniors to smaller, more suitable housing through initiatives such as ‘from big to better.’

• Staff shortages in healthcare have reached critical levels and will continue to increase in the coming years.

• Health care costs increased again in 2025 and are expected to significantly increase in the years to come. The government focuses intensely on the mobility of the elderly to counter loneliness and physical deterioration in order to reduce costs. New housing concepts, like Seasons, positively contribute to this goal.

Residential (investment) market

Market rent increases and annual rent indexation in the mid-rental sector tied to CPI

• The housing shortage will continue to increase in the coming years due to high population growth and an insufficient number of new homes.

• Construction costs have risen substantially. Contractors' order books are well filled (14.4 months in November 2025) and continue to grow, which means it is expected that price increases will persist for the time being. As a result, contractors will continue to benefit from an advantage in tender processes.

• A shortage of personnel is one of the main production constraints. Approximately 40% of construction companies report experiencing a shortage (EIB, 2025).

• Next to this, grid congestion, nitrogen and accumulation of demands are causing the lag of construction.

• While the national housing policy implemented by VRO (STOER, Wet versterking regie volkshuisvesting, etc.) and the efforts to stimulate construction are positive developments, these measures have not yet led to a substantial increase in housing supply.

• In 2025 the cabinet was dissolved for the second time; therefore, the parliamentary elections on October 29, 2025, brought uncertainty. A minority cabinet will be in place in 2026.

• Thousands of rental homes have been divested due to, among other things, the Affordable Rent Act and significantly reduced appeal of private property rentals due to the tax treatment in Box 3. This trend is expected to continue unabated in the next few years. As a result, the rental stock is declining sharply, putting upward pressure on the market rents in the unregulated sector.

• There is a growing trend of municipalities shifting to the national mid-rental sector cap (€1,185 in 2025 and €1,228 in 2026). As the municipal caps are often lower than the Affordable Rent Act, this shift strengthens the business case for the mid-rental sector. However, a municipal ban on rent liberalisation and disposing of homes after continuous years of tenancy remains in force for 15 to 20 years.

• Contract indexation for the regulated mid-rental sector under the Affordable Rent Act is based on the Consumer Price Index instead of the Collective Labour Agreement +1%. This is due to most mid-rental contracts being set at the maximum rent permitted under the WWS system. However, the impact on capital growth is limited since valuations are primarily driven by the disposition scenario (and therefore the vacant value growth).

• The price increase of owner-occupied homes appears to be levelling off. However, according to the major banks, it will remain relatively high in 2026 and 2027, as high home equity and inheritances provide significant capital for households and drive up prices.

• Decreasing interest rates in 2024 and 2025 have contributed to strong investor appetite among Dutch institutions (including ABP, Rabobank, SPW and NLV) for (new) rental housing. A total of €18 billion is available to invest, of which €12 billion is categorised as impact investing, primarily targeting affordable housing.

• Currently, foreign investors appear to have limited interest in Dutch rental properties. This is primarily due to the current investment climate, characterised by changing regulations, fiscal rules and high transfer tax in 2024 and 2025.

• Transfer tax on residential decreased from 10.4% in 2025 to 8.0% as per 1th January 2026.

• Brussels may agree to guaranteed loans for housing corporations acquiring mid-market rentals. This would enable housing corporations to bid more competitively (due to a lower return requirement and cheaper capital), leading to increased competition for dominant mid-market rental properties.

Monetary and macroeconomics

Risk-free returns remain stable while initial yields decline

• After several rate cuts in 2024 and 2025, the ECB is not expected to lower the deposit rate substantially further, with at most one or two additional cuts expected.

• Interest rates on Dutch government bonds are expected to remain fairly stable in the coming years at around the 2025 level of 3.0%.

• Geopolitical tensions such as the conflict in Ukraine, developments in the Middle East and shifting United States trade policies under President Trump are creating economic uncertainty.

• Inflation is expected to decrease further in the Netherlands, which will reduce wage growth in the coming years.

• Modest economic growth is expected, while unemployment remains low, signaling resilience in the labour market. However, defence spending rising to 5% of GDP could have a negative effect on the macroeconomy in the long term.

• Initial yields for residential real estate compressed significantly in 2025, declining by 10 to 20 basis points depending on region, age and location.

• The initial yields for private care apartments compressed by 5 to 10 basis points, also depending on region, age and location.

• Yields are expected to remain stable in the coming years, partly due to the forecasted stable interest rate environment.