Holland Metropole member Bouwinvest plans to invest €1 billion in housing in the Netherlands over the coming years to increase the supply of affordable and sustainable homes.

“We are able to do this thanks to our shareholders, the Dutch pension funds,” says Paul van Stiphout, Fund Manager Dutch Residential Investments. “Capital can be fickle, but a stable, high-value shareholder base allows us to plan for the future.”

Shareholders seek a return on investment of 5.5% to 7% by developing sustainable homes in the mid-market sector and just above, Paul says. “We can improve affordability in the long term by increasing housing supply. We will also sell older properties to fund new construction. We’ve agreed at least 50% of our capital will go to new builds, ensuring growth in the total housing stock.”

One million new homes

However, additional capital is needed to fully address the housing shortage in the Netherlands. The government aims to build one million new homes, an effort requiring around €400 billion in investment.

“This is significantly beyond our capacity alone,” Paul says. “Dutch pension funds have already heavily invested in the market. To meet the target, new capital must come from foreign investors, including pension funds in Canada, Germany, and Switzerland.”

The Dutch housing market has attracted foreign investors due to its transparency and maturity. Public-private partnerships are common, and institutional investors play a crucial role. However, competition from other European markets facing similar shortages presents a challenge in securing foreign capital.

European problem

“Our tight housing market is a European phenomenon and we are competing with European markets with cities like London, Berlin and Madrid,” Paul points out. “If these markets have beter investment conditions than we have, then the capital is more likely to move there.”

Housing minister Mona Keijzer has committed to reducing bureaucratic hurdles and planning requirements to speed up construction. She has also allocated €2.5 billion to infrastructure improvements, flood risk management, and expanding electricity grid capacity.

In addition, the transfer tax on residential property sales, currently 10.4%, will be reduced to 8% in 2026 to encourage investment.

“We call for a stable, stimulating long-term investment strategy and a competitive tax regime,” Paul says. “We must have the equal conditions for all investors, domestic and foreign. We need capital, and international players must feel welcome. The government must enhance the investment climate to make this possible.”