Dutch housing market may have passed lowest point, Heijmans construction firm thinks

The housing market is expected to rebound, but the exact timeline remains unclear, according to construction company Heijmans. "The lowest point in the Dutch housing market may already be behind us," financial director Gavin van Boekel suggested. CEO Ton Hillen also expressed his confidence in the market. However, he is uncertain whether this implies that his company can sell more homes in 2023 than the previous year.

"We're aiming for 1600 to 2000 homes. I can't say exactly where we'll end up, but it will be somewhere in between," Hillen noted. This could mean a rise or drop in annual sales compared to 2022. In the first half of the year, Heijmans sold 876 homes, fewer than the 1031 from a year earlier but more than the 780 sold in the second half of last year.

Van Boekel and Hillen highlighted that the steep increase in mortgage rates and high inflation have significantly impacted the market. Yet they observe that both interest rates and inflation appear to be stabilizing. Many companies have significantly increased wages, giving homebuyers more spending power. "We should also consider that we still have a significant housing shortage in the Netherlands. The pressure on the market is immense," Hillen said.

The demand for houses can greatly vary from project to project, as revealed during the presentation of Heijmans' semi-annual results on Friday. The construction company has only sold around 30 percent of the homes for the planned apartment project Bellevue in Utrecht. Therefore, Hillen does not dare to greenlight the actual construction. "We're not going to do that. The risk is too high," the CEO said. As a rule, Heijmans only starts construction once 70 percent of the homes in a project have been sold. However, exceptions can be made. For example, the company recently made a decision in Zutphen at 50 percent pre-sales.

Heijmans is expecting to be in a favorable position as the market recovers. This is partly due to the planned acquisition of the family business Van Wanrooij in June, which can build many homes and has substantial land resources. Yet, Heijmans cannot avoid the necessary permit procedures, which is, according to Hillen, one of the most significant inhibiting factors concerning new construction. He said that if the Netherlands wants more homes in the coming years, this issue needs to be addressed.