High costs, rising interest rates, slow processes for granting permits and uncertainty about policy changes are making it increasingly unlikely government targets for building affordable homes will be met, ABN Amro economists have said in a new report.
By the end of September, permits had only been issued for 43,000 new homes, but the government target is for 80,000 to 100,000, the report points out. Housing minister Hugo de Jonge has pledged to build 900,000 new homes by 2030, of which 60% must be affordable rentals or owner-occupier properties.
‘It is now almost impossible to build affordable homes in some areas,’ economist Paul Bisschop said. Some locations are difficult because of protests from locals but market factors are now making the situation worse, he said.
‘Costs have risen 20% in the past few years and now we have higher interest rates as well,’ he said. The price of building land is also rising.
ABN Amro expects interest rates to peak in the first quarter of next year and remain at a higher level than in recent years. Higher interest rates are not only impacting on the amount potential buyers can borrow but also on developers and investors, Bisschop said.
Construction sector lobby group WoningBouwersNL said in September that residential housing developers and investors are increasingly delaying or pulling out of projects and thousands of homes at the planning stage are affected
Figures drawn up by real estate advisory group Capital Value showed at the time that some 25,000 properties at the planning stage are either being delayed or cancelled – around a third of the new homes realised in the average year.
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