Four Pitfalls in Market Analysis, Recording & Investments and How to Avoid Them

Anyone investing or undertaking new projects must consider circumstances that are changing more rapidly than ever before. Interest rates, regulations, building use, and sustainability requirements are constantly evolving. As a result, projects that looked promising on paper often disappoint in practice. Anyone who wants to stay on top of things must be aware of four major risks and be willing to look beyond traditional calculations.

Risk 1: Tighter financing and valuation

Financing real estate on favorable terms is becoming increasingly difficult. In the first half of 2025, the number of transactions declined as investors became more cautious and there was less suitable supply. At the same time, interest rates and maintenance costs are rising, and valuations are being assessed more critically. This is narrowing the gap between costs and returns. Many investors still use overly optimistic scenarios, creating the risk of lower-than-expected returns. The solution lies in realistic scenarios. Calculate in advance what will happen if interest rates remain higher than expected or if rental income takes longer to materialize. Also carefully consider the expected long-term value increase and ask yourself whether the property will still be attractive to the market in ten or fifteen years.

Risk 2: Connecting user needs

The way we use buildings is changing rapidly. Offices are increasingly partially vacant, and total take-up in the Netherlands in 2025 was still lower than before the pandemic. Vacancy rates were around 8 percent at the beginning of 2025. Companies demand flexible spaces, good energy performance, and locations that support hybrid working. Buildings that don't adapt to these needs run a greater risk of vacancy and depreciate more quickly. Therefore, it's important to consider future use from the outset. How flexible is the building's design, how attractive is the surrounding area, and how strong is the demand for this type of property? By investigating in advance how adaptable a building is and what alternative uses are possible, the risk of long-term vacancy can be reduced.

Risk 3: Changing regulations

Real estate is highly dependent on tax and legal regulations, which have been changing rapidly in recent years. De Nederlandsche Bank (DNB) regularly points out that parts of the market are vulnerable due to high debt levels and price pressure. Energy regulations, lease terms, and tax regulations are also being adjusted more frequently. This can have direct consequences for real estate values ​​and investor returns. Even a small change can significantly disrupt the cost-return ratio. The best approach is to calculate multiple future scenarios. What happens with stricter sustainability requirements, a higher tax burden, or a restriction in rental regulations? By building flexibility into the financial structure and taking stricter legislation into account, you're less likely to encounter surprises.

Risk 4: Sustainability costs

The impact of sustainability on real estate is growing every year. For example, neighborhoods with high energy bills and low resilience to climate risks are coming under pressure more quickly. ESB warns that many properties unprepared for new energy standards or climate change are at significant risk of value. For investors, this means that a property that meets current standards today could require substantial investments within a few years. The solution is to fully incorporate sustainability into the valuation from the outset. What is the energy label, what improvements are needed, and what will they cost? Are there risks from flooding, heat, or soil subsidence? By factoring these into the investment, you prevent future liabilities from eroding returns.

The four risks mentioned above, related to financing, use, regulations, and sustainability, are unfortunately not the only pitfalls in market analysis of listings and investments. For example, there is still considerable political uncertainty regarding the next government's course regarding real estate financing and regulation in the Netherlands. Nevertheless, these risks are easily manageable for those who dare to invest and analyze multiple scenarios. This will pay off, as the desire and ability to build in the Netherlands will only increase.

This article previously appeared on Vastgoedjournaal: https://vastgoedjournaal.nl/news/71040/vier-valkuilen-in-marktanalyse-opname-and-beleggingen-en-hoe-ze-te-omzeilen?