Number of building permits in 2023 perhaps not to exceed 55,000

Number of building permits issued equals level of 2019
The number of building permits issued is comparable to 2019, when the Council of State put an end to the Dutch policy relating to nitrogen emissions. Although politics and the media devote much attention to the housing construction challenge, the number of building permits is simply not taking off. The fall in the number of building permits issued is caused by various factors, including the increased capital market and mortgage loan interest rates, the ballooning construction costs, a lack of capacity among municipalities, a surfeit of legislative proposals affecting the housing market, nitrogen issues, and more.

Possibly as little as 55% of government target to be achieved
The reduction in the number of permits issued contrasts sharply with the government target of realising around one million homes in the coming years. The most recent forecasts from ABF, the research agency commissioned by the government to assess the housing shortage each year, show that the housing shortage has grown to 390,000 homes in 2023. This corresponds with the analyses conducted by Capital Value at the beginning of this year, and amounts to 4.8% of the housing stock. The government target of reducing the housing shortage to 2% has thus moved even farther out of reach. The shortage has increased sharply relative to 2022, a development caused in large part by the unexpected surge in population growth (148,000 instead of the estimated 90,000). Taking into account demographic expectations and future building output, the housing shortage will only have been marginally reduced by 2030, in which year it will amount to 4.1% of the housing stock.

New-build home transaction volume inadequate
The transaction volume in the Dutch residential investment market amounted to ?1.51 billion in the first six months of 2023, 61% less than previous year. Investments in new-build output in the first half of 2023 will enable the construction of approximately 4,300 new rental homes (?977 million), merely half of the number of new-build homes in the same period of the year before.

Marijn Snijders, managing director at Capital Value: “There are sufficient plans in place to realise 30,000 additional affordable homes per year. The reason why so many plans are on hold right now is because of financial impracticalities. It is very important for the money made available through the Startbouwimpuls [“Construction start boost”] to be awarded as soon as possible to projects with a start of construction in 2023 and 2024, to prevent the building output from coming to a halt. We call on political parties to keep taking action to maintain momentum in the building output, even with the present caretaker government. Architectural firms are already sounding the alarm because so many projects are on hold and have no choice but to let skilled employees go. The housing shortage affects everyone, and should not a be a point of controversy in decision-making. We cannot afford any delays at this point in time.”