The establishment and justification of the discount rate are published annually on the website of the Housing Corporations Authority (Aw). This is stipulated in the Handbook for Model-Based Valuation of Market Value for Reporting Year 2024 (chapter 9.2.6). Today, the new policy value for reporting year 2025 and the budget 2027 - 2031 has been published.
The principles have remained unchanged compared to the WACC determination as presented in the publication Derivation of the Discount Rate for Policy Value for Internet Consultation.
The WACC (Weighted Average Cost of Capital) is an estimate of the return that corporations need for the maintenance of their real estate. The update of the WACC follows the building blocks as laid down in the document Derivation of the Discount Rate.
The WACC shows a very limited increase. This is the result of:
- A slightly lower solvency based on the new policy value than last year.
- A higher return on equity.
- A very limited increase in the return on debt.
For DAEB, the WACC is equal to 4.22% (0.05% increase) and for non-DAEB, the WACC is equal to 4.76% (0.06% increase). This WACC applies for the dVi 2025. In the dPi 2025, the current discount rate is still applied; 4.17% for DAEB and 4.70% for non-DAEB.
