Dutch new-build home sales stall 25% as high interest rates stall market

New-built home sales in the Netherlands fell by a quarter in the third quarter to just 5,572 units - the lowest level in more than a decade, except 2023, Trouw reports. Higher interest rates, rising prices, and the mismatch between what buyers want and what developers are building could reportedly stall the government’s goal of adding 100,000 homes a year. According to the industry group WoningbouwersNL, the stock of unsold apartments has climbed to 4,963, the highest since the housing-market crisis of 2013.

Average prices for newly built homes now stand at 514,000 euros, up five percent in a year. Mortgage rates of around 4.5 percent are reducing what first-time buyers can borrow, making existing homes - including former rental properties - more attractive.

Even though the Nethelrands urgently need more homes, these new energy-sufficient houses and apartments reportedly do not always sell well. That is because of high interest rates, expensive prices, and the presence of cheaper alternatives on the market. Furthermore, “of consumers looking for a new-build home to buy, a quarter want a detached house with a garden.

Yes, such homes make up only four percent of the supply. Many municipalities prefer to build apartments," said Jannes van Loon from WoningbouwersNL. “More ground-bound homes (detached or single - family homes with gardens) would get new construction moving again quickly.”

That is because these homes sell faster than the apartments currently dominating supply. Developers generally need roughly 70 percent of a project pre-sold before they start building, so quicker sales would let them reach that threshold sooner and begin construction more rapidly.

Data from the new-construction monitor kept by Delft University of Technology show that apartments priced above 600,000 euros take more than 300 days to sell. Cheaper or mid-priced apartments take about 100 days, while ground-based home seven faster.