Local authorities gave permits to build 18,800 new homes in the second quarter of this year, the highest figure since the end of 2021 and 21% up on the same period last year, national statistics agency CBS said on Thursday.

It is the third quarter in a row that the number of permits has risen. The increase means the number of new homes coming on the market will go up in two years’ time, given the length of time it takes to realise new developments.

High interest rates, rising construction costs and uncertainty about government regulations had impacted the number of plans for new homes in previous years.

Last year, 73,000 new homes were added to the Dutch housing stock, as were 15,000 apartments that had been created in repurposed offices and other buildings.

The new government, meanwhile, is committed to building 100,000 new homes a year, in line with the previous one’s efforts. The Netherlands faces a shortfall of one million new homes by the start of the next decade.

Research by advisory group Buildsight on behalf of business broadcaster RTL Z suggests new homes in the Netherlands are getting smaller, as higher costs begin to bite.

The average size of a new rental flat in 2023 was 105 square metres, while the average owner-occupier house was no less than 184 square metres in size, RTL Z said. They may still large but are, nevertheless, the smallest new rental properties and private homes in more than 10 years.

The Dutch still live in large spaces when compared with their European peers. The average Dutch person has 52 square metres of personal space, compared with an EU average of 43 metres.