The new Municipal Land Price Policy 2003 confirms the Municipalityâ€™s policy over the past few years. Nevertheless, in part market factors and conditions will influence the policy. The Municipality advocates a functional price policy, where the value of land is related to its destination. Land prices for commercial housing and working functions will be based on a so-called residual valuation: the commercial new value minus construction and other real estate-linked costs. The difference (residue) is the value of the land.
Minimal land prices for social housing and studentsâ€™ housing projects
The policy notices a stable price level for the housing market. The market remains strained due to the limited supply of affordable housing, but in the more expensive sector a certain amount of leveling-off of prices is noticeable. Initial costs however, are on the increase; it is expected that initial costs will increase by 5.5% during 2003. Land prices for owner occupied houses, depending on the area, therefore are declining. Land prices for social housing projects remain stable at â‚¬ 10,119 per unit. In order to provide an impulse for studentsâ€™ housing projects the land price will be halved, i.e. â‚¬ 5,060 per unit.
Unchanged land prices for office projects
Land prices for office projects for 2003 will remain unchanged with those of 2002. This measure reflects a long-term policy in order not to further stimulate vacancy rates in Amsterdam. For the short term vacancy rates are expected to increase due to a declining demand and the present new developments.
It is expected that the stagnating economic growth will have less effect on the market for industrial real estate. The present development in this market segment justifies to maintain price levels of 2002. Demand after retail space remains high, noticeably in the fashion trade. International retail chains and brand stores continue to compete for space. Some retail segments, such as the telecom sector, are confronted with a saturated market, so that retail space becomes available.
For more information please visit www.grondbedrijf.amsterdam.nl.
(source: Grondbedrijf Amsterdam)