Over 74,000 new homes were completed in the Netherlands last year, the highest figure in 10 years, but still far below the government’s target of 100,000.

The number of completions was particularly high in Zuid-Holland province and in Amsterdam, according to new figures from national statistics agency CBS.

In Amsterdam, 6,800 new homes were added to the housing stock, taking the total up by 1.5% to 475,000. In the other big four cities, around 2,000 new homes were completed.

In Zuid-Holland, which includes the Holland Metropole partner cities of The Hague and Rotterdam, 14,500 new homes came on the market.

10% decline

The figures coincide with the publication of a new report by the construction industry’s economic institute EIB, which suggests up to 10% fewer houses will be built in the next two years, despite the government’s pledge to add 900,000 to the national housing stock by 2030.

In addition, the number of permits for new projects is also down, which will have an impact later in the decade.

In particular, the cost of building materials and high interest rates are having an impact on developers’ willingness to invest and legal requirements stemming from nitrogen-based pollution caused by construction are also slowing down processes, the institute said.

Nimby

In January, housing minister Hugo de Jonge published plans to make it quicker to build new housing, partly by limiting the right of appeal against new developments.

It currently takes an average of 10 years from the start of the process to completion but this can be speeded up by removing red tape and combining processes, De Jonge said.

‘We want to break through the ‘not in my backyard’ sentiment,’ he said. ‘We owe it to everyone looking for a place to live to do everything in our power to speed up housing construction.’

Dutch housing minister Hugo de Jonge has reached agreement with all 12 provincial councils on plans to develop new housing over the coming eight years, but developers have described the programme as ‘unrealistic’. 

In total, the Netherland’s 12 provinces have committed to building over 900,000 new homes, of which two-thirds will be classed as affordable, the minister told parliament earlier this month. ‘We are faced with the enormous task of building a total of 900,000 homes in the coming years,’ De Jonge said. ‘This requires a joint effort from governments, corporations and the private sector.’ 

Most of the new homes will be built in the provinces where the five big Holland Metropole cities are – Amsterdam, The Hague, Rotterdam, Utrecht and Eindhoven. Provincial and local councils will firm up the plans in localised agreements in the coming months, including ‘the specific locations, target groups, rental/purchase distribution and price categories,’ De Jonge said. ‘With this approach, we are taking back control of public housing.’

The government defines affordable housing as property with an official rental value of up to €1,000 per month or a purchase price below the national mortgage guarantee ceiling, which is currently €355,000. 

Investors have already warned that the government’s plan to regulate most of the rental market in the Netherlands will reduce rather than increase supply. And developers now say that the 900,000-home project will not achieve its aims without more involvement from the private sector either.  

Construction sector lobby group Bouwend Nederland said in a reaction that it had many questions about the De Jonge’s plan, pointing out that most of the planned developments are still up in the air, thanks to nitrogen and noise norms. 

‘It is a great ambition… but there are many hurdles to take to make it a reality,’ said director Fries Heinis. ‘Some of the plans are concrete in the short term… but the government must involve the private sector far more than it has done so far.’

 Dutch developers association Neprom described the plans as ‘unrealistic’, saying that the number of housing units is partly based on ‘plans for projects in which the housing will not be completed until well after 2030.’

Neprom chairwoman Desirée Uitzetter said that building homes is becoming increasingly expensive, partly due to the impact of the Ukraine crisis. The 900,000 figure, she said, is ‘not based on really concrete projects, but on ideas about projects.’

‘In our view the private sector has not been involved enough in making these projects concrete and achievable,’ she said. ‘That is where the pain is.’

Meanwhile, research by the construction sector’s economic institute Economisch Instituut van de Bouw suggests the housing crisis would be solved if every town or village added one or two streets of homes to its housing stock. 

Small scale projects in villages and towns have the potential to add 300,000 homes to the city’s housing stock, the EIB said in a new report. In Noord Holland province, for example, where 184,000 homes will be built under De Jonge’s programme, 200,000 additional homes could be built if every town added a street, the EIB said.

Many of the projects in De Jonge’s list are ‘large, complex inner city locations, which will first need infrastructure and area-based transformation,’ EIB director Taco van Hoek said. ‘It will take years to draw up the plans, realise the infrastructure, remove existing buildings, move industry and clean up the soil,’ he said.

Dutch housing minister Hugo de Jonge’s plans to reform the rental housing market include a new upper limit for placing rent controls on property at around €1,000 per month.

De Jonge said this spring that he would regulate the rents of more of the country’s housing stock in order to ‘reduce excesses’ in the market and that he was thinking of an upper limit of between €1,000 and €1,250.

At the moment, landlords have free choice in deciding the rent of property worth more than 143 points in the regulatory system. Points are awarded for amenities such as the number of bedrooms, whether or not the apartment has luxury bathroom fittings and the age of the property. 

The point total will now be increased to 187, which means nearly all rental property will be subject to some form of price control – as yet, it is not clear exactly how much. Just 9% of Dutch housing stock is currently available to rent to people earning more than €40,000 a year.

Criticism

News of the extension of rent controls was heavily criticized by developers and investors at the time – partly because of the lack of clarity and partly because it would make some developments unprofitable. 

Dutch real estate investors wrote to De Jonge warning that new home construction projects will slow drastically if he presses ahead with plans to regulate more rents. Without change, just 50,000 new homes will be built every year, rather than the 100,000 that the government is counting on, lobby group Neprom told the minister in July.

Higher wages and the cost of materials are also having an impact, with a 9% drop in the number of new rental properties coming on the market last year. 

Rents are rising

Figures published by rental housing platform Pararius in October show that rents in the non-rent controlled housing sector in the Netherlands have risen sharply in the five big cities, and properties are let more quickly. 

In Amsterdam, tenants with new contracts are paying 10.3% more than they did a year ago, with rents reaching €25.24 per square metre, or an average of €1,766 for a 70 square metre apartment. 

In Utrecht, new contract rents were up 6.5% to €20.33 per square metre – or €1420 for a 70 square metre flat. In Rotterdam, The Hague and Eindhoven, rents for new contracts now average between €17 and €18 per square metre, Pararius said.

Owner occupied sector

Meanwhile, figures from real estate agents’ association NVM indicate that the average house sold for 5.8% less in the last financial quarter than between April and June. The Q3 results are the first solid indication that the Dutch property market is taking a downturn, after years of strong growth. 

Rising interest rates in particular are reducing the amount would-be buyers can borrow. The government is also introducing tougher borrowing requirements for home buyers next year.  

De Jonge will publish his detailed plans for reforming the rental housing sector in November.

In total, 34 Dutch cities, companies and organisations make up the 2022 Holland Metropole delegation to Expo Real in October. Together, they are showcasing how Dutch developers, investors and local authorities are putting the circular economy, climate adaptation, sustainability and social cohesion high on their priority lists.

This summer’s drought and last year’s floods have brought home how important it is to tackle climate change and adapt urban environment to future needs – particularly in a low-lying country like the Netherlands.  And there is growing awareness throughout the country that the big problems facing it – carbon emissions, nitrogen-based pollution, water shortages and surpluses, the energy transition and a shortage of homes – are all connected in some way, and that working together is a key part in solving them.

Investor Bouwinvest, for example, is supporting the Red & Blue research project, a five year programme backed by the government, universities and private sector, which aims to establish ways to make the built environment climate adaptive. But the company is also active in its own right.

‘The  effects of climate change are part of our risk models, We include climate adaptation programmes in our portfolios and we have added these climate risks into our investment decision-making process,’ says CEO Mark Siezen.

The Holland Metropole alliance, first launched almost 10 years ago, aims to promote public private partnerships at a metropolitan regional level, making sure the issues facing urban areas are put on the agenda and that there is enough executive and investment power to make real change.

‘We are creating a city in which heavy rainfall does not damage our homes and roads, in which you can find a cool place to sit on hot days and in which greenery survives drought,’ says Rik Thijs, Eindhoven’s climate alderman.  ‘Climate adaptation is not just about technical solutions, but about making Eindhoven a better place to live and work.’

The Netherlands has drawn up a list of targets for reducing greenhouse gases and eradicating natural gas as a source for heating and cooking in homes. On a national basis, the government has pledged to cut greenhouse gas emissions by 49% in 2030 compared with 1990.

Developers and investors too are setting their own standards. Investor a.s.r. real estate works with strategic targets to ensure its portfolio is climate adaptive, taking four major climate risks into account: heat, flooding, drought and extreme weather

Ballast Nedam reduced the CO2 emissions of its owner occupier homes by an average of 69% last year, while Syntrus Achmea has cut the CO2 emissions of its residential portfolio by 40% compared with 1990. Others are working on innovative techniques.

‘As a family business we feel responsible for future generations, so we have opened a circular construction hub called Urban Miner. We focus on timber construction, invest in emission-free equipment and develop energy neutral buildings,’ said a spokesman for Dura Vermeer.

Architects bureau UNStudio, is developing new design strategies for adaptive reuse, transformation and extending building lifespan including smart, low-carbon and energy-producing building innovations.

Developers too are investing in new techniques and materials. While timber has now become the new standard, Ballast Nedam has branched further out and is using straw, a residual product from farming, as a construction material in its new ‘Nature Houses’ – with construction due to start in 2023. By using prefabricated straw panels, the company says it is able to build on a large scale and the resulting home is 95% biobased.

MRP has also turned to prefabrication. ‘We focus on modular building techniques and this means we can produce homes more efficiently and economically,’ said Bart Meijer CEO at MRP. ’This benefits both the planet and the consumer.’

To find out more about what the Holland Metropole partners are showcasing at Expo Real, visit A2.130.