The large Dutch construction group VolkerWessels no longer sees projects getting off the ground due to the rise in interest rates and the new rules for rental properties. “Investors are dropping out, so we can no longer build a residential tower in Amsterdam, for example.”
CEO Alfred Vos says against The Telegraph that there was a project in Amsterdam where no house had been sold after eight months. Lowering prices would be impossible. “We have to meet many requirements and with a 3.9% margin we don’t have that room. The most important thing is that the investors we need to remove the unprofitable top in projects are not there. They no longer invest in the Netherlands “
“Residential construction is declining very quickly and has now really come to a standstill,” says Vos. “We have never seen such a rapid decline before. The buyers are missing. In particular, the necessary bulk sales to investors, which are necessary to boost the flywheel of large-scale projects, have come to a standstill. And then there will also be such a residential tower not.”
Yesterday alderman Reinier van Dantzig (Housing and Urban Development) wrote together with fellow aldermen from Utrecht, The Hague, Rotterdam and Eindhoven a concerned letter to Minister Hugo de Jonge (Public Housing). They wrote that building affordable housing “in today’s market conditions with high construction costs, rising interest rates and scarcity of personnel and materials” has become even more challenging.
Construction start bonus
They therefore asked for the introduction of a Construction Start Premium, which is a financial contribution from the government for the start of construction of a home. The aldermen also want the government to guarantee a percentage of the unsold real estate before construction starts.
Van Dantzig and the other four aldermen also see investors dropping out. They pointed out that the higher transfer tax means higher investment costs for investors and that a temporary reduction in transfer tax can help institutional investors to get involved in a project, allowing construction to start.
