Big dip in housing construction expected next year, Minister says
Housing construction in the Netherlands is stagnating under difficult market conditions. Minister Hugo de Jonge of Public Housing expects a significant dip next year, he said in a letter to parliament, announcing investments to keep that dip as small as possible.
De Jonge’s goal is to create 900,000 extra homes in the Netherlands up to and including 2030. But he is facing significant headwinds, he said in his letter to the Tweede Kamer. High construction costs and rising interest rates are frightening off investors and buyers. It is becoming increasingly challenging for developers to get plans financed, and as a result, housing construction plans get no further than the drawing board.
De Jonge said he needs time to adapt plans to the new market situation. He, therefore, expects 2024, in particular, to see a dip in construction as the parties involved adjust. The Minister is pushing 250 to 300 million euros into measures to keep that dip as small as possible. The money will go toward a “start building impulse” to round off funding for projects ready to start construction.
The Minister also asked municipalities to look for alternative locations for stalled projects. He will have “acceleration talks” with cities and provinces on how to allow construction to continue as much as possible.
De Jonge stressed the urgency of realizing as many new homes as possible. The Dutch population grew nearly twice as hard in 2022 as in 2021, mainly due to migration picking up again after the last coronavirus restrictions lapsed. The existing housing shortages get bigger as the population grows, and population growth is not expected to slow down in the coming years.
On the plus side, De Jonge also announced that 90,000 homes were built or otherwise created last year. That is 10,000 more than he expected would be completed in 2022. These figures include flexible, temporary homes and homes created by converting old commercial spaces.