Dutch new-build home sales drop 14% as higher rates, uncertainty weigh on demand
The recovery in the Dutch new-build housing market has stalled, with sales of newly built owner-occupied homes dropping 14 percent in the first five months of 2026 as higher mortgage rates, economic uncertainty, and stronger competition from existing homes weigh on demand, ING Bank reported on Thursday.
About 12,100 newly built homes were sold between January and May, down from 13,800 during the same period a year earlier, according to figures from WoningBouwersNL. The decline marks a break from the recovery that had been underway since 2023, ING reports.
A growing supply of existing homes has intensified competition for new construction. According to NVM data, about 15 percent more existing homes were put up for sale in 2025 than in 2024. Figures from the Dutch Land Registry show that roughly one in six existing homes sold last year had previously been rental properties. The larger supply has reportedly made it easier for buyers, particularly first-time purchasers, to find existing homes, especially apartments, shifting some demand away from new construction.
The composition of the new-build supply may also be reducing its appeal. Apartments accounted for about 53 percent of newly listed homes marketed by NVM brokers over the past four quarters. Although apartments suit current demographic trends and first-time buyers, lengthy construction periods of up to three years and anti-speculation clauses preventing resale within several years have reportedly made them less attractive. As a result, new-build apartments are remaining on the market longer.
Demand has also been weakened by rising mortgage rates and growing economic uncertainty linked to geopolitical tensions. The most common mortgage rate—a 10-year fixed-annuity loan with a National Mortgage Guarantee—has risen by about 20 basis points since the start of the year, reducing borrowing capacity by roughly 2.5 percent and hurting affordability. New-build homes are particularly sensitive to higher rates because buyers generally face longer bridging periods than those purchasing existing homes.
Supply-side risks are also said to be increasing. Construction material costs have risen since the start of the war in the Middle East, partly because of higher energy prices. Developers have attempted to pass some of those costs on to buyers, but their room to do so is limited because about two-thirds of new homes must remain below the 2026 affordability threshold of 420,000 euros. Pressure on margins has led to project delays and, in some cases, cancellations.
Long-standing obstacles, including nitrogen-emission restrictions, lengthy objection procedures, and labor shortages, continue to slow construction, while electricity grid congestion is reportedly increasingly causing additional delays and higher costs. However, ING said government measures aimed at easing those constraints are unlikely to significantly boost supply in the short term.
Despite the slowdown, underlying demand reportedly remains strong because of the persistent housing shortage. Energy efficiency has become more valuable since the 2022 gas crisis, making new homes relatively more attractive than existing properties. Government financial support programs and policy measures also continue to support the market, the bank states.
