Amsterdam expects to add just 5,000 homes this year, a third fewer than projected

Amsterdam expects that the construction of around 5,000 new homes will be complete by the end of this year. That is a third lower than the 7,500 new homes the city was aiming for this year, alderman Reinier van Dantzig reported on Thursday. “The construction dip continues. The housing construction figures are lagging behind my ambitions, and it is a drag for every home.”

As expected, fewer homes were built in the first half of 2024 than the municipality had hoped. In the first six months, 1,773 homes were put under construction. Based on the planning stock for the remaining six months, Amsterdam expects another 3,300 homes to be built in the second half of 2024. But whether this will succeed remains to be seen given the uncertainty on the market due to high interest rates, expensive materials, rising wage costs, and the demand for real estate.

According to the alderman, there is no one single cause for the slow housing construction. The city has, therefore, taken several measures to keep construction going. For example, it has offered developers in an advanced stage of their projects the option to request a recalibration of land prices. If the land price turns out lower, they can use the lower price. In the first half of this year, developers requested land price recalibration for 30 projects, and in at least nine, the price turned out lower than originally agreed. “Thanks to the crisis measure, the chance that these projects will continue is much greater.”

The city also moderated the CPI indexation on land price agreements so that land prices don’t fully increase with the interest rate and extended two impulse subsidies for transforming other buildings into housing and increasing the feasibility of housing construction projects.

“I will be proud if we can build around 5,000 homes in these crisis years,” Van Dantzig said. “Construction of a home still starts every two hours.” But he added that the coming period will still be very uncertain.

The national government has made building homes a priority, but the Amsterdam office of mayor and aldermen remain concerned. “Fewer resources than necessary have been made available, and it remains to be seen to what extent the new government measures will be effective,” the city said. “It is, therefore, difficult to predict when construction will pick up again.”