Troostwijk Index 2025
Inisghts & Publications
Jan 6, 2025
At Troostwijk, our annual index figures provide a forecast of expected cost increases for the coming year. These figures are based on anticipated changes in wage costs and the price trends of raw materials and goods. Once released, these predictions are fixed and will not change. However, if the actual price developments differ from our forecast, we will make automatic adjustments in the following year to balance any discrepancies.
The Troostwijk indexes reflect the long-term structural development of costs, filtering out cyclical fluctuations and the price spikes or drops influenced by geopolitical events as much as possible.
| Annual predictions for 2024-2025 | 2024 | 2024 | % |
|---|---|---|---|
| Commercial and office buildings | 130.0 | 138.2 | +6.3% |
| Homes | 128.7 | 135.1 | +5.0% |
| Company inventory | 126.8 | 131.5 | +3.7% |
2019 = 100
General Developments
While 2024 was less turbulent than the previous two years, we still saw fluctuations in raw material markets. Prices surged in the first half of the year, only to decrease in the second half. Disappointing economic news from major global economies such as China and Europe added pressure on prices. In the Netherlands, a moderately performing economy and high interest rates contributed to a decline in construction and industrial production, particularly in the first half of 2024. This decline puts additional strain on prices for locally produced materials and goods.
Industrial production in the Netherlands has been under pressure since mid-2022, partly due to a slowdown in the German economy, one of the country’s key markets.
Wages and Cost increase
In 2024, higher wages played a significant role in the increase in construction costs and the production costs of inventory. For example, the construction sector saw an additional 7% wage increase, along with a fixed bonus of €150 for all employees. A similar trend was observed in the metal sector, a key indicator for inventory.
The metal sector's labour agreements are longer-term, with wages set to increase gradually by 9% between June 1, 2024, and December 31, 2025. Similarly, the Metal and Technology sectors will see a 10% wage increase, alongside a fixed bonus of €100, from April 1, 2024, to February 1, 2026.
For 2025, we expect construction and production costs to rise once again, driven by increasing wages. However, the outlook for 2025 is more optimistic, with improved economic prospects (GDP growth of +1.5%) and falling interest rates, which are expected to stimulate investment in both construction and industrial production. Prices for materials and raw materials are expected to stabilise or increase, reflecting long-term trends.
Energy, raw materials and materials
Energy prices continued to decrease throughout 2024, although they remained significantly higher than the levels seen in 2021. For example, natural gas prices were still over 60% higher in 2024 compared to 2021, and electricity prices remained approximately 80% higher. However, slight upward pressure on energy prices returned in the second half of 2024. Looking ahead, we expect energy prices to remain structurally higher compared to 2021.
Crude steel prices have been under pressure for some time, falling by around 15% in 2024. The decrease in global demand, particularly in construction and parts of the industry, has contributed to this trend. The lowest steel prices in eight years were recorded by the end of 2024. However, metals like aluminium and copper saw price increases in 2024. We expect metal prices to stabilize in 2025, with potential slight increases if global economic growth surpasses expectations.
Oil prices peaked above $90 in the first half of 2024 before dropping back to $75, largely due to decreased demand and the absence of production restrictions from oil-producing countries. The current geopolitical situation in the Middle East (e.g., the Israel-Gaza-Lebanon-Iran conflict) introduces significant uncertainty in oil price predictions, with the potential for volatility.
In terms of building materials, 2024 saw a mixed picture. Materials like wood, where international competition plays a significant role, continued to see price declines that began in late 2023. On the other hand, materials produced primarily in the Netherlands, such as concrete and cement, stabilized in 2024 after sharp increases in 2023.
Finished and semi-finished steel products showed a downward trend in 2024, and this was also the case for concrete and cement. The fall in energy prices helped reduce costs for these products. As energy prices stabilise and labour costs continue to rise, we expect a stable to slightly higher pricing trend for 2025. The demand for building materials may increase slightly as construction activity picks up, leading to a moderate rise in material prices.
Wage costs
In 2025, wage growth will continue to outpace inflation. The construction and infrastructure sector has requested a 7% wage increase, and this will likely apply across other sectors as well. The wage agreements for Metalektro and Metal & Technology will remain in effect for 2025, with significant increases still expected. However, the pace of wage growth is expected to moderate in 2025, with an average wage increase of around 4% across the Netherlands.
For our index calculations, we have assumed a 7% wage increase in the construction sector and a 5% wage increase for other industries. As new wage agreements are confirmed, we will update our quarterly index figures.
Uncertainty
Geopolitical developments, government policies, and climate change continue to introduce uncertainty in 2025. The outcome of the U.S. presidential election is one key factor to watch. With the possibility of a second term for President Trump, concerns in Europe about his protectionist policies and the risk of new tariffs could influence prices, potentially creating additional cost pressures.
Trade conflicts, particularly between China and the West, continue to affect specific raw material markets. Additionally, the ongoing conflict between Russia and Ukraine remains a factor in energy pricing, especially regarding gas. Tensions in the Middle East could also lead to significant fluctuations in oil prices.
The Dutch government’s housing policies, aimed at stimulating construction, could increase the demand for building materials and labour, potentially driving up costs. Meanwhile, efforts to limit CO2 emissions may lead to higher production costs for the industry. On the positive side, investments in sustainable infrastructure could help lower costs over the long term. Lastly, extreme weather events linked to climate change, such as floods, droughts, and hurricanes, could disrupt raw material production and supply chains, creating short-term price volatility.
TROOSTWIJK QUARTERLY INDEX FIGURES – FORECAST 2025
To get a better picture of the actual price development, we advise you to follow our quarterly figures. We also point out that the index figures are general indexes and not specifically aimed at one type of real estate or sector. It is therefore wise to continue to follow price developments in (specific) submarkets. If you have any doubts about the value development, you can of course always contact Troostwijk Taxaties.
Forecast quarterly index figures 2025
| 2024 – IV* | 2025 – Yo | 2025 – II | 2025 – III | 2025 – IV | |
|---|---|---|---|---|---|
| Commercial and office buildings | 131.8 | 133.7 | 135.0 | 137.0 | 138.2 |
| Homes | 128.9 | 131.3 | 132.1 | 134.3 | 135.1 |
| Company inventory | 128.3 | 129.6 | 130.5 | 130.9 | 131.5 |
'* final Quarter IV 2019 = 100
The Troostwijk quarterly index figures appear every quarter in the month preceding the new quarter for subscribers to the Index newsletter. And are placed online on the first working day of each quarter.
