Housing shortage in the Netherlands will increase for at least three years to 316,000 homes in 2024
10 februari 2022
With a housing shortage of almost 279,000 homes (3.5% of the stock), the pressure on the Dutch housing market is unprecedented. Despite the current efforts of the government and market parties, the shortage is expected to increase further to 316,000 homes by 2024. The problems are particularly acute for starters and the elderly. It is expected that it will not be possible to add 100,000 new homes a year to the stock until 2026-2027. This is clear from research conducted by Capital Value, in cooperation with ABF Research. Dutch and international pension funds play an important role in adding new rental homes to the stock. For the next three years, they will jointly have 29.5 billion euros available for investments in affordable rental homes. Housing associations can build 25,000 social housing units annually when the landlord levy is completely abolished.
4.7% increase in the number of households until 2026
The growth in the number of households is an important indicator of the demand for new homes. Over the past five years, the number of households has increased by an average of 64,500 per year. At the beginning of 2021, there were 8,043,000 households in the Netherlands. The number of households is expected to increase by 4.7% in the period 2022-2026 (Primos forecast for 2021). Approximately 69% of the increase in the number of households concerns single people. Of total household growth, 61% will be caused by the increase in households in the over-75 age group (232,500).
Housing shortage currently at 279,000 homes, 3.5% of the stock
Due to the expected increase in the population and the number of households, the housing shortage will increase further to 316,000 homes in 2024. This amounts to 3.9% of the stock. The fact that a decline in the housing shortage will take at least three years can be explained by the growth in the number of households, too few building permits in recent years and the fact that building homes takes an average of two years and even 36 months for larger projects in the cities. The largest shortages can be found in the major cities, including in the Greater Amsterdam region (6.7%), Delft and Westland (6.5%) and Flevoland region (5.5%).
More and more young people are experiencing difficulties
There are currently 924,000 young households (through age 29). 244,000 young households live suboptimally. From 2022 to 2026 the total number of young households will increase by 24,000 households. Joining the housing market is currently exceptionally difficult and affects mainly young households with a low income.
Largest shortage of affordable rental and owner-occupied homes
In absolute numbers, the biggest discrepancies can be found in the regulated rental sector where the annual demand exceeds the annual supply by 64,000. The non-regulated rental sector also shows a significant discrepancy between supply and demand, with annual demand exceeding supply by 16,000 rental homes. For the entire owner-occupied sector, the difference between supply and demand is 137,000 homes. More than 60% of these are inexpensive owner-occupied homes. The creation of sufficient inexpensive rental and owner-occupied homes will be an enormous challenge in the coming years, partly due to the enormous increase in construction costs and high land costs.
Moving up is possible by building more healthcare real estate and senior housing
When bring about future housing supply, it is important to look closely at the demographic developments in the regions. Of total household growth in the next five years, 61% will be caused by the increase in households in the 75-84 age group. In the period up to 2030, there will be 310,000 of these households, of which 187,000 will be single. In the period up to 2030, an increase of 40% is expected of the number of over-75 households with mild to severe mobility restrictions. More supply is needed for this target group in particular, especially in the non-regulated rental segment. If these rental homes can be built, more upward mobility will take place and starters and families will have an opportunity to purchase owner-occupied homes that will then be freed up. The survey shows that healthcare real estate investments are very popular with various investors and that they will have more than 7 billion euros available for new investments in the next three years. This is considerably more than the amount of approximately 1 billion that is currently invested annually. 64% of the housing associations also want to invest more in healthcare real estate and senior housing.
35,000 affordable rental homes possible annually
For the next three years, investors have jointly indicated that they can invest 29.5 billion euros in the new-build output of rental homes. Dutch and international pension funds can collectively create at least 10,000 rental homes annually, the majority of which are in the affordable segment. If more plans are accelerated, this number could be significantly higher. International investors are mostly complementary to Dutch pension funds. While Dutch pension funds invest primarily in projects worth between 20 and 50 million euros, international parties generally focus on projects larger than 50 or even 100 million euros (large-scale projects in urban areas). Housing associations can also invest more, now that the landlord levy is being abolished. They can create 25,000 new social rental homes annually.
Road map to 1 million homes in 10 years
In the coming five years, an average of 1.3 million households per year will look for a home. Of the annual house-seekers, 46% are looking for a rental home. Of these, 75% are looking for a regulated rental home and 25% a non-regulated rental home. The other part (54%) of the house-seekers is looking for an owner-occupied home. In order to meet the growing demand for housing, approximately 1 million homes must be built over the next 10 years, including replacement new build output for homes to be demolished. According to the report Inventory of Planning Capacity October 2021, there will be a net planning capacity of over 1,044,000 homes for the next ten years. This should be sufficient, but the question is what will actually be achieved. In the study, 75% of the developers and 68% of the housing associations indicated that the slow permitting and long procedures are reasons for not being able to bring about new build output plans. To this end, municipalities may need to increase their capacity with money from the national government. The coming period should show how concrete the plans actually are, what the consequences are of any delay in RO procedures or the nitrogen problem and what needs to be done to further accelerate projects in order to be able to build 100,000 new homes annually after 2026 and 2027.
According to Marijn Snijders, Managing Director of Capital Value: There is still a lot of capital available for investments in Dutch rental homes. All parties agree that more construction is needed, but the ambitions are still not being achieved. With even better cooperation, we can break through this deadlock. When creating new homes, the future need must be qualitatively considered. For this purpose, we recently developed the National Housing Construction Monitor (in Dutch: Nationale Woningbouw Monitor), with which we not only want to provide insight into the target group and segment of the projects, but can also make reliable statements about the national planned stock. In addition, even more innovation in the construction industry will be necessary, in relation to the rising construction costs, which pose a risk for the construction of affordable homes. Accelerating must be the starting point for everyone, especially with the risk of future interest rate increases."
For more information, please refer to our Research section, where a download of the summary is also available.