Home seekers even more in the dark: developers postpone new construction projects until better times | living

Despite the enormous housing shortage, the production of new-build homes isfaltering. Developers are increasingly delaying projects or even pulling theplug on a job altogether.

That concludes the industry association of developers WoningBouwersNL in a newhalf-yearly report. The association relies on a survey by real estate advisorCapital Value, which shows that builders are currently making adjustments,delaying or even canceling projects for 25,000 planned new-build homes.Sometimes this also concerns projects for which the permits have already beenissued. As an indication: in recent years about 70,000 new homes have beenbuilt every year.

The postponement or cancellation has various reasons. First of all, there isthe mortgage interest rate increase, which is almost 4 percent again. Thismakes homes less attractive to investors. Of course, the borrowing capacity ofbuyers is also decreasing. And it’s not just about starters, because those whomove up have a lot less interest advantage when they move. In any case, thisgroup often thinks twice, for fear that prices will fall and the new home willbe flooded.

There is also inflation with the rapidly declining purchasing power and thesharply increased prices for materials that developers encounter.

Difficult position

“This puts home builders in a precarious position: they have to design cheaperhomes for a less wealthy market, while their costs and uncertainties increasesharply,” the report said. According to The Hague’s policy, the builders mustalso build the lion’s share – two thirds – affordably.

This does not always work, with the result: developers wait for better timesand postpone their projects. In the first half of this year, the number ofbuilding permits issued fell by 18 percent compared to a year earlier. At thebottom of the line, new-build homes are becoming unreachable for many buyers,concludes WoningBouwersNL. “This is a disaster for home seekers, because thescarcity will only increase in this way.”

“Many people simply cannot or do not want to pay for a new-build home anymore,construction is no longer in line with the market”, responds housing marketprofessor Peter Boelhouwer (TU Delft).

Sales of new-build homes are falling. © WoningBuildersNL

The number of new-build homes sold has therefore also fallen in recent months,according to the trade association. In the first half of 2021, 19,520 newhomes were sold. In the first half of 2022, it was 16,946 – a decrease of 13percent. Buyers are more likely to reconsider the purchase if, after aninterest rate increase, it appears that they are unable to secure financing.

It is not only buyers who have less and less insight into a new-build home.Aedes, an interest group for housing corporations, recently concluded thatthere is not enough building land available for social housing. According toAedes, the land that is there cannot be paid for.

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