New housing plans plunge as high interest rates bite
Major residential construction projects are being scrapped because they don’t have enough buyers and the number of new developments is plunging, the AD reported on Tuesday.
Developers organisation Neprom expects the number of new homes this year to be down 50% on previous years, which is a ‘dramatic’ reduction, chairman Jan Fokkema told the paper.
The Glashaven tower in Rotterdam is just one of the prestige projects which have been cancelled after it emerged not enough of the 141 apartments and penthouses had been sold. Developers require 70% advance sales to press ahead with a project.
Last year, 20,000 new homes were sold to private buyers, compared with 36,000 in 2021. And based on a survey of its members, the Neprom expects this year’s total to be just 15,000.
‘It is proving difficult to get through the dip,’ Fokkema said. ‘Investors are reluctant to move because of high interest rates and the mortgage interest rate for buyers has gone up enormously.’
Delays caused by the nitrogen problem, the high cost of building materials and slow licencing procedures are also proving obstacles to development.
The government has set a target of building 900,000 new homes by 2030.
‘It is just not going to happen given the way things are going,’ said Dura Vermeer spokesman Glenn Metselaar. ‘One solution would be to build on the edge of cities, as we did earlier with the Vinex residential programme.’
The name Vinex comes from an agreement to foster the building of 634,800 new homes in rural areas between 2011 and 2015. The new estates were particularly popular with young families but were soon criticised for not having enough facilities such as shops.
Neprom said that the government could step in, by guaranteeing 50% of the sales, which would allow a project to go ahead more easily.
MPs are due to debate the government’s housing plans on Thursday.
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