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A review of 2011 and forecast for 2012 for rural markets in Holland

January 27, 2012

While 2011 was difficult year for the Dutch agricultural and rural property market with fewer transactions reported than in 2010, the leading industry association, NVM, forecasts that the continuing demand for land will keep prices stable and that nice, well located properties will retain their value.

Agricultural property in most sectors and in all regions in the Netherlands saw both a decline in new supply and less demand in 2011. There is, however, a willingness in the agricultural sector to continue to invest and the market, therefore, is  generally fairly stable, according to Arjan van der Waaij, Agriculture & Land (NVM A&L) Chairman for NVM (pictured). While this is good news for those already in the market, NVM A&L expects the mandatory small business investment for 2013 will be too great a hurdle for newcomers. "Only large existing parties will remain in the market; starters are scarce," says Van der Waaij.

Overall, the land market remains very dynamic. Private individuals and investors are moving increasingly to the land market, according to Van der Waaij. Prices have remained stable, despite the fact the largest buyer—the Dutch government—has withdrawn from the market. "Everyone expected that prices would drop, but this is not the case," says Van der Waaij. "There is less supply of arable land and farms, and the demand for land comes mainly from dairy farmers, who have an interest in larger blocks of high quality land in good locations." Rezoning for alternative uses, such as bed and breakfast, campgrounds, etc., are currently limited due to the economic crisis, but still offer many possibilities, depending on the location.

Developments in the agricultural sector in the Netherlands are largely dependent on the European agricultural policy and economic development. NVM is calling on authorities to clarify policies on the purchase of “natural areas” and speed up the licensing and permit procedures in order to encourage further investment/expansion.

Looking ahead for 2012, Van der Waaij sums up: "There is an expected increase in the number of businesses for sale, particularly in intensive farming and a growing demand for land. The soil is mainly of interest to dairy farmers; building are more difficult to sell. The national real estate market will continue to show a downward trend, as prices of agricultural property will remain under pressure.”

ICREA