High prices and interest rates hit new house building plans

No more than 70,000 new homes will be built in the Netherlands this year and in 2024, and that is way below the government’s target of 100,000, according to the construction trade’s economic institute EIB.

In 2022, the number of new building permits was also down 12.5% on 2021, the EIB said in a new report.

The cost of building materials and high interest rates are having an impact on developers’ willingness to invest and legal requirements on nitrogen-based pollution caused by construction are also slowing down processes, the agency said on Wednesday.

EIB chief Taco van Hoek of the EIB said the trend is worrying. ‘The delays will work through up to 2030 unless a substantial number of new licences are granted,’ he told the Financieele Dagblad.

In addition, more needs to be done to make sure there are enough construction workers, with a shortfall of 12,000 looming in the second half of the decade.

The government has set a target of building 900,000 new homes by 2030 and last week housing minister Hugo de Jonge published a raft of plans which he hopes will speed up the process.

House prices

The sale of newly-built houses and flats fell by over one third in the third quarter of last year – the biggest drop since 2015, according to figures from national statistics bureau CBS, and the Kadaster land registry office earlier this month.

Meanwhile, ABN Amro economists say they expect house prices to fall 6% this year and a further 4% in 2024.

That will take the average price back to the mid 2021 level of around €360,000, after the 6% drop in the fourth quarter of last year, according to CBS figures.