Dutch real estate bank FGH published their annual real estate report (“vastgoedbericht”), with a message that, by now, every real estate professional should know by heart: back to basics, back to real estate. Or as FGH put it: “Focussing on bricks and mortar”.
Conveniently, the report is bi-lingual in Dutch and English and is warmly recommended:
The recent market developments make one aspect crystal clear to FGH Bank as a real estate financer: risk will again have a price; with this, the real estate market has landed in a different era. Compared to the foregoing years of great prosperity, the world has turned upside down. Investments in real estate will be much more critically evaluated by investors, by developers and, last but not least, by financiers.
The excess air will hence disappear from the market. FGH Bank expects, however, that this process will take place in a controlled fashion; there is no question of a bursting bubble. The extremes will simply disappear from the market. Quick profits from transactions of a highly speculative nature are over for the time being.
The real estate market is thereby returning to the basis, the long-term balance. There may currently be a dip, but there is room to climb out again. A condition for this is that real estate players must remain loyal to the market and opt to turn the tide jointly.