Number of permits for housing construction continues to fall

Last quarter, municipalities again issued fewer permits for housing construction compared to the same period a year earlier, Statistics Netherlands (CBS) reports. As a result, fewer new homes will likely be built in the near future, says chief economist Peter Hein van Mullingen of the statistics office.

The Netherlands needs hundreds of thousands of new homes to address the major housing shortage. But the construction sector suffers greatly from the nitrogen crisis when getting permission to build new homes. Last autumn, the Council of State ruled that construction projects will no longer be automatically allowed to temporarily emit nitrogen. They now need an environmental permit. In addition, municipalities are struggling with personnel shortages when granting permits, as is the construction sector itself. As a result, it takes longer for new homes to be completed.

In April, May, and June, municipalities issued permits to build more than 15,000 new homes. That is 5 percent less than in the second quarter of last year. Fewer permits were also granted in the first three months of this year than a year earlier.

According to Van Mulligen, the non-granted permits are primarily behind the homes not getting built. “But homes are also created through division and transformation,” he said. Homes created by converting office buildings, for example, are not included in the figures on building permits.”

CBS also reported that construction turnover increased by 7.7 percent in the past quarter compared to a year earlier. Adjusted for inflation, that is just under 3 percent, said Van Mulligen. Permitted construction costs for all homes were lower and fell by 3 percent to almost 3.3 billion euros.

According to CBS, more construction companies went bankrupt in April, May, and June than in the same period a year earlier. There were 106 bankruptcies in the sector in the second quarter, compared to 76 a year ago. In the first three months of this year, 92 construction companies went bankrupt.