The Dutch real estate sector has responded with cautious optimism to the surprise election victory of Geert Wilders’ far-right PVV party in yesterday’s elections.
Wilders has spent decades in politics, mostly in opposition, campaigning on an anti-immigration, anti-Islam and anti-EU ticket. Days before the election, he toned down his rhetoric, saying that Islam was no longer the party’s main priority. Following the election victory, Wilders said he wants to be prime minister for all Dutch people and that the country should be there for the Dutch. The PVV won 37 seats in the house of representatives, but it still needs the support of several other parties to get a majority of 76.
“I’m disappointed with the results of the election as I am pro Europe, but for the housing market this doesn’t necessarily need to be a bad story,” said Emile Poort, head of Benelux for German fund manager Patrizia.
A housing shortage and rising rents have been a problem for years in the Netherlands. The previous government tried to make housing more affordable for people on middle incomes by making a larger part of the housing stock subject to rent regulation. The uncertainty this created scared away investors and developers, making the situation even more urgent.
Marijn Snijders, director at property fund manager Capital Value, said: “We need foreign capital as we need to build more houses. High interest rates and uncertainty have been a problem. As soon as there is clarity a lot will be solved.”
Like all other parties, the PVV wants to build more houses. It wants to build outside built-up areas, speeding up the process of getting planning permission and drop the requirement that new houses may not be heated with gas.
“Wilders’ party wants to build more houses by cutting red tape. That’s something we investors like to hear,” said Patrizia’s Poort. “How they’re going to do that is a big question mark.”
Jeppe de Boer, managing partner at fund manager Annexum, agrees, saying: “The biggest problem is money. Nobody knows where the €300 billion to €400 billion needed to build new houses should come from.”
Apart from making housing affordable, the PVV’s party programme has little to say on real estate or the economy. Marco Hekman, divisional president, Continental Europe and chief executive of CBRE in the Netherlands, said he hopes the liberal party (VVD), which has been the main party in a coalition government during the past 13 years under prime minister Mark Rutte, will get on board with Wilders as it has more specialist knowledge. Before the election, CBRE had organised masterclasses to inform investors on what each political party had in store for the property sector. It had not included the PVV, thinking it would not get so many votes, said Hekman. This morning, he scrambled to read the party programme to find out what it plans.
“It’s not necessarily bad, but we don’t know what [Wilders] stands for,” said Hekman.
The business friendly VVD has traditionally been the party of choice for entrepreneurs and real estate professionals. Even with the VVD on board, Wilders would still need the support of the New Social Contract Party to get a majority of seats. A combination including the NSC party, which was founded only two months before the election by Pieter Omtzigt, who broke with the Christian Democrats in 2021, however, could cause friction.
“Economically, the PVV is very left wing, Omtzigt’s NSC is also pretty left wing,” said De Boer. “Whether this will lead to good things is difficult to say.”
Above all, real estate professionals want to see a new government cutting taxes to bring retail and international capital back into the market, he said. Whether a coalition with PVV and NSC will do that is doubtful.
“On the negative side, PVV wants to cut rents and increase rent subsidies,” said Patrizia’s Poort. “The sector is not impacted by the latter, the taxpayer will be, but cutting rents would be difficult as the sums are already not adding up for investors and developers. Land transfer tax went from 2% to 8% and then 10.4%, interest deductibility was cut. We need to generate a 4.5% cash return for our investors otherwise they will switch to different assets classes.”
International media have focused on the fact that Wilders, as with former US president Donald Trump, is perceived as a climate change denier and that he wants a referendum on EU membership. Real estate professionals are not too concerned about either issue.
“Net zero won’t change, because our investors, occupiers and we as Patrizia still want it,” said Poort.
On the EU, none of the other parties wants a referendum, having seen how the UK has been since Brexit. They hope that in a coalition, Wilders may find he needs to comprise, like far-right politician Giorgia Meloni did after she became prime minister of Italy a year ago.
“He needs to convince his coalition partners,” said Capital Value’s Snijders. “I hope it’s just a storm in a teacup.”
For now, the caretaker government of Rutte will continue. That may take longer than expected as forming any coalition with a clear majority is going to be difficult. Alternatively, a coalition on the left could be formed, led by the combined Green and Labour party (GL-PvdA). But they only won 25 seats and would need several coalition partners. Leaving out the biggest winner of the election could look like ignoring the will of the people.