Without further incentives the Dutch housing shortage will increase to 450,000 homes in 2027
12 februari 2024
The housing shortage in the Netherlands currently stands at 390,000 homes and is expected to persist well into the foreseeable future. Due to the declining numbers of issued building permits and delays and postponements of new-build projects for which permits have been issued, Capital Value forecasts an increase in the shortage to 450,000 homes in 2027. However, this enormous increase can be prevented: there are sufficient plans in place to start building more than 100,000 homes in 2024. "These plans are only feasible with additional incentivising measures from the government and a collective responsibility on the part of market parties," says Marijn Snijders, director at Capital Value. Capital Value gave a presentation in Utrecht last week, presenting additional figures obtained from residential investment market research conducted annually in collaboration with ABF Research.
Housing shortage continues to rise, national government's objectives to remain unfulfilled until 2041
Due to the declining number of building permits and delays in new-build projects, the production of homes will remain too low in the coming years and the housing shortage will continue to grow – unless incentivising measures are implemented. Based on the Primos model, ABF Research forecasts a housing shortage of 397,000 in 2027, a figure equal to 4.8% of the housing stock. Although the national government has set a target of reducing the housing shortage to 2.0% in 2031, the Primos forecast shows that this objective will not be realised until 2041. 
Capital Value expects housing shortage to increase to 450,000 homes
The Primos model assumes a higher number of building permits to be issued in the coming years than is realistic, given the current market conditions. No more than 54,000 building permits were issued in 2023, and market circumstances such as the high mortgage interest rate mean that not all issued permits in fact lead to the construction of new homes. Developers participating in the study indicated that the construction of 7,477 homes was delayed in 2023. Capital Value expects that this will cause the housing shortage to increase to 450,000 homes by 2027, or 5.3% of the stock.
Sufficient plans in place for the construction of 100,000 homes to start in 2024
Research by Capital Value shows that sufficient plans are in place for the construction of 100,000 homes to start in 2024. Thijs Konijnendijk, Head of Research & Data Intelligence: "The fact that enough concrete plans exist is good news. Of these plans, 46% concern the affordable rental segment, which comes down to 46,000 rental homes (regulated and medium-priced) that can be built in 2024. What we are seeing in practice, however, is that many of these plans are on hold due to insufficient off-plan sales or mismatches in sales to investors and housing associations. In 2023, total investments in new-build rental homes were 32% lower than in 2022. We need to ensure that the annual expansion of the housing stock does not fall to the levels we saw in 2012-2017, with the absolute low point of 40,860 homes in 2012."
Insufficient plans for student housing, despite 21% more students living at home
The Netherlands was home to one million young households (households up to the age of 24) in 2023, an increase of 21% compared to 2014, with 65% of young people between the ages of 18 and 24 living at home. This percentage is increasing as a result of the tight housing market; even "older young people" are experiencing greater difficulties in finding a home. A total of 60,000 additional homes for students need to be built in the coming years. However, the transaction volume of homes for students and young people fell to approximately €183 million in 2023, a reduction of nearly 58% compared to 2022. Capital Value's study among developers showed that just 7% of the homes they intend to build in the coming years are homes for students or young people. In short, there is a great need for more plans to build homes for this demographic. Demand for student housing remains high among investors, with 69% of international investors indicating an interest in acquisitions in this segment, provided the investment climate improves.
Only 3% of plans concern senior citizens' accommodation
As the population continues to age, the number of older households (age 65 and older) will increase over the coming decade, rising from 2.5 million in 2024 to 3 million in 2033. Meanwhile, the number of 75+ households with impaired mobility is set to increase by 218,000 between now and 2039. Population ageing is most pronounced in Flevoland (+109%), southwest Overijssel (+69%) and Greater Amsterdam (+66%). The current housing stock does not adequately meet the housing needs of the growing senior population. Investments in new rental homes for seniors in 2023 amounted to just 1,700 homes, well short of the required number of 35,000 per year. Research by Capital Value shows that just 3% of the plans of constructors and developers concern senior citizens' housing. Municipalities and market parties will need to work out far more specific plans for the construction of senior and sheltered housing, not just to meet housing needs, but also to facilitate better occupancy turnover.
Pension funds and housing associations wish to invest more in affordable rental homes
Capital Value's research shows that pension funds have more money available in 2024 than was invested in 2023. The primary obstacles in 2023 were the increased interest rate, excessive construction costs and uncertainties about the regulation of medium-priced rental homes. Housing associations could also continue their growing role in the addition of new homes in 2024, provided the government refrains from imposing rent reductions. Furthermore, both institutional investors and housing associations would benefit from measures to realise the construction of medium-priced rental homes, such as more advantageous financing conditions.
Solutions to prevent a collapse in housing construction
Marijn Snijders, managing director at Capital Value: "Given that sufficient plans exist for 2024 and pension funds and housing associations still have money available, this is precisely the time for politicians to do everything they can to prevent a collapse in housing construction. Under the current market conditions, many plans are not financially feasible. We have drafted an action plan for the housing market to resolve this issue. In addition to a reduction in the transfer tax and an expansion of the Startbouwimpuls subsidy for the construction of new homes, we recommend that additional measures be taken – temporary or otherwise – to encourage the realisation of affordable new owner-occupied homes and better financing possibilities."
More information?
The full research report is available via research.capitalvalue.nl.