Urgent need for new housing outside of major cities, says top construction CEO

The Netherlands urgently needs to allow more housing developments outside major cities, for example on the outskirts of Almere where more space is available, said Ruud Joosten, the CEO of BAM, the country's largest construction company. "There are currently mainly inner-city housing construction developments. These are often small projects with only 30 homes,” he noted.

This call for more housing developments outside major cities is often heard and has attracted interest in political circles in The Hague. However, BAM feels that not much is materializing on the ground. "The fall of the Cabinet will also result in significant delays," Joosten predicts. He fears that major investors might postpone housing plans, especially if they await clear policy directions on issues like the rental market.

Housing Minister Hugo de Jonge previously made comprehensive housing agreements with all twelve provinces. However, it is the responsibility of these provinces and municipalities to further detail these agreements into regional housing deals. This is where the bottleneck lies, Joosten pointed out. "There must be a political will at the local level," he said. Securing permits often takes a long time, with disputes over zoning plans and objection procedures causing further delays.

Joosten said he believes swift actions are needed to meet the Cabinet's ambitious target of constructing roughly 100,000 new homes in the Netherlands every year. This target is currently falling short. In the first half of the year, BAM sold fewer than 500 houses, compared to over 850 in the same period last year.

This decline is also attributed to the recent dip in the housing market, which Joosten largely attributed to rising mortgage interest rates and high inflation. However, BAM noticed a slight increase in housing sales in June and July. "Perhaps when people saw their paychecks, they thought they might still afford the mortgage," he noted.

For the whole year, BAM estimates its sales to be around 1,500 houses, about a quarter less than in 2022. Joosten emphasized that BAM is just one player. He implied that the company alone cannot build 100,000 homes annually. However, BAM's housing production could potentially double in the coming years if more construction sites become available.

For Joosten, the housing market remains a key focus for his company, given the persistent housing shortage. "The construction of houses will pick up, not next year, but the year after," he predicted. "Maybe not reaching the 100,000 homes in a year initially, but that surge is on the horizon,” he added.