“Planned Residential Towers and Estates Stalled Due to Lack of Buyers, Despite Government’s Affordable Housing Drive”

• Leanne Kraniotis

  economics editor

Thousands of planned new-build homes will not be built for the time being because there are too few buyers. In a year’s time, project developers have removed at least 4694 owner-occupied homes from sale due to lack of interest.

And especially in recent months there have been many, according to figures from real estate association NVM and data company Brainbay.

In many places, planned residential towers or new housing estates are not being built for the time being due to changed market conditions.

See six suspended projects here:

Construction companies, project developers and brokers clearly see less interest in new construction. The craziness on the housing market is over and existing homes are falling in price considerably, partly due to the high mortgage interest.

But new-build houses often do not fall in price or fall less, because builders have to sell them for a certain amount in order to earn something from it. After all, there are fixed costs, such as building materials and personnel. As a result, new-build homes are now relatively expensive compared to existing buildings.

“New-build homes remain firmly priced in a cooling market,” says Arjan Lamberink. His brokerage has branches throughout the Northern Netherlands. “Existing buildings become more attractive and then you take it for granted that an older home is less energy efficient.”

“It turned from a seller’s market to a buyer’s market within a few months. It is clear that due to recent developments we are all creating fewer homes than hoped,” says a spokesman for construction company Vorm. The company says it is always looking at what it can still build.

More construction companies are saying they are doing everything they can to keep projects going, according to a tour of the NOS.

“There are no projects on hold with us,” says a spokesman for construction company Van Wijnen. “There are a number of projects where we have to be creative.” For example, the company is building 180 apartments in Capelle aan den IJssel. 90 of these would be sold to private individuals. “We have now sold approximately 60 of these to a private investor.” These will therefore be rental properties instead of for sale. “We still see a lot of interest from investors.”

And in Amsterdam-Noord, Van Wijnen is building nearly 700 homes. The municipality did have additional ‘extra-statutory’ sustainability requirements for this, which would make construction more expensive. After consultation, the municipality amended those requirements. “Partly because of this, we succeeded in keeping the projects feasible.”

“We hardly cancel projects in expansion areas,” says Ton van de Klok of construction company KlokGroep. This concerns new housing estates around villages and towns. “We do phase projects there, for example, then we don’t realize something all at once, but in smaller tufts.”

They also adapt projects. “We are redeveloping plans, for example with fewer detached houses or two-person houses. And more affordable terraced houses in them, which are now easier to sell.”

He notices that the situation is more difficult at so-called infill locations. This usually involves building in cities, between existing homes. “It’s there in the land, construction and additional costs. These are sometimes higher than what you can sell the project for. In some places we are now looking at whether we should put something on hold. And then only start building when construction costs are normalized.”

There are calls for government support to allow more new construction to continue. A project is often only built when 70 percent of the owner-occupied homes have been sold, because then insurers issue a new construction guarantee. With support from the government, that percentage should be reduced to 50 percent, says Neprom, the organization of project developers. “I definitely think that’s a good idea,” says estate agent Arjan Lamberink. “This allows projects to be built sooner.”

Ton van de Klok of KlokGroep would also like it if the national government or provinces offered some extra support. “But in practice that will be complicated. Before something like this has been arranged politically and legally, the market may have turned around again. We rely most on our own efforts to continue building.”

The government wants 900,000 homes to be added by 2030. That’s about 100,000 a year. The Economic Institute for Construction expects that we will not achieve this this year and next year. And the more projects that are now canceled, the more difficult it becomes.

New construction is not only struggling because of fewer buyers. Check out the other issues here: