Welcome to the chicken coop

Right now, the world is in limbo. How long will the war in Ukraine last? Will the price increases and inflationary increases continue at this rate? How will that affect mortgage rates, house prices and new construction? These are questions that no one has a definitive answer to, so we can only speculate. Funda saw a slight increase in confidence in the market among buyers in the first quarter. Among sellers, that confidence declined slightly. They are becoming somewhat uncertain about the outlook, because mortgage rates are rising. This may encourage sellers to put their homes up for sale a little earlier than planned. NVM saw an increase in the supply of existing homes in March, against the long-standing trend. This may give buyers a little more negotiating room, although 79% of the supply was still sold above asking price. But a slight drop is what it is, just as the average sales price increase also levelled off a bit.

Whether it will all make much difference remains to be seen. A real market boost can only come from a sharp increase in the production of new homes. This stagnated last year. But several municipalities have announced that there is a lot ‘in the pipeline’ for the coming years. And Minister Hugo de Jonge has set to work energetically, as I wrote last time. He published a Housing and Building Agenda in which the government will provide more guidance and stimulation. The minister also wants to enforce that the plans provide for sufficient ‘affordable housing’, that is, below a purchase price of 355,000 euros or with a rent of up to 1,000 euros.

That will be a huge challenge given the rising prices of building materials and fuels. The brick recently became 50% more expensive, the price of iron and steel increased by 70%. The top executive of the TBI construction group recently expressed fears in De Telegraaf that insisting on a large proportion of affordable housing in construction projects will lead to an excess of small apartments in inner-city residential complexes: “basically chicken coops. It is to be hoped that the minister will also make larger projects possible in meadows on the outskirts of the cities. And that he does not focus too unilaterally on huge numbers of ‘affordable housing’. Housing in the middle and upper segments will lead to through-flow and that has an even greater positive effect on the market. Moreover, this will prevent the minister from having to say ‘welcome to the hen house’ too often when transferring the ‘Hugo homes’.