The Dutch Ministry of Interior has published the "State of the Housing Market 2021", which lists the most important developments in the Netherlands real estate market. Based on current building plans, the Netherlands appears on track to solve its housing shortage by 2030.
So far, the real estate market seems to have been barely affected by the epidemic. Despite the pandemic, demand for housing remains high and there is a severe housing shortage, although it has declined slightly in the pandemic year. Shortages will continue to increase in the coming years until reaching a peak in 2024, the report said.
Build more houses
In 2020, the Netherlands had a shortage of approximately 279,000 dwellings, which was less than a year ago, when the shortage was 331,000.
According to researchers, this is because in the first year of the COVID-19 pandemic, population growth was slower, fewer people immigrated to the Netherlands from abroad, and the death toll increased.
In addition, more new homes were built than expected, nearly 70,000. Due to the nitrogen problem and the epidemic crisis, fewer new homes were originally expected to be added.
Despite this, the housing shortage remains severe, researchers say.
The housing market was more or less in equilibrium when the housing shortage was about 2% of the housing stock, and now the shortage is 3.5%. House prices have also risen sharply as a result, with owner-occupied houses on average 7.8% more expensive in 2020 than in 2019; a year ago, the price increase rate was 6.9%.
Building plans
Researchers believe the housing shortage will worsen in the coming years, as there is likely to be less construction this year and next due to nitrogen issues and the pandemic. However, a recovery is expected in 2023, which is also reflected in the government's construction plans.
Under these building plans, the Netherlands is expected to overcome its housing shortage by 2030. In fact, according to the original plan, the number of additional houses will be higher than the actual number needed, and about 706,000 houses will be added by 2030. However, the current plan is to add about 960,000 more houses.
Researchers said these surpluses were necessary in the plan, the report said. "Experience shows that on average a third of housing schemes are delayed or do not proceed."
The role of private investors
Investors play an increasingly important role in the property market, with more and more available homes being invested in They then rent them out to first-time buyers who are unable to finance their own homes, in part because of rising home prices.
About 20% of homes that transacted in the first half of 2020 went to private investors taking advantage of low interest rates.
As of January 1 this year, private investors must pay higher transfer taxes. This single measure led many homebuyers to similarly move quickly in late 2020, according to researchers.
The long-term role of investors in the housing market is uncertain, the researchers wrote. Buying to rent is likely to become less attractive due to increases in transfer taxes, protections for homebuyers and limits on maximum rent increases in the free letting sector.
