Housing Supply in the Netherlands: The Road to More Affordable Living

With the supply of residential dwellings in the Netherlands having failed to live up to demand over the last decade, apprehension among the population about the availability of affordable housing has risen. Particularly spatial, regulatory, planning, environmental, and supply chain constraints have kept a lid on construction. Recognizing the socio-economic challenges posed by inadequate housing supply, the government has embarked on an ambitious agenda with promising steps to boost the availability of affordable properties. To strengthen the traction of housing policies to reach its intended goals, a larger role for economic incentives and private sector involvement should be evaluated.

Following an extended phase of contraction after the global financial crisis, the Dutch housing market has experienced a prolonged period of remarkable price increases. After reaching a trough in mid-2013, house prices have nearly doubled, thereby also surpassing their previous peak seen on the eve of the global financial crisis by more than half. Demand was supported by a decline of mortgage interest rates towards historic lows, advantageous borrowing conditions, e.g., in the form of rather generous loan-to-value limits or the existence of interest-only mortgages, and a tax system strongly favoring the ownership of homes.

Also Read: Roadmap for Increased Adoption of Modern Methods of Construction in Public Housing Delivery