In its report on the construction sector, ABN Amro wrote that unfavorable market conditions are making it increasingly difficult to build new homes. Rising interest rates, higher sustainability and quality requirements and difficult permitting due to nitrogen issues are creating headwinds, the bank said. ABN Amro concludes, “Delivering energy efficient and affordable new construction is a daunting task.”
These issues are putting more pressure on the Cabinet’s ambition to build 900,000 homes by the end of 2030 to address the housing shortage, according to the bank. said it would lead to higher financial costs, make clients more hesitant and put the brakes on riskier projects. Higher interest rates also mean less demand for relatively expensive new homes. Low borrowing capacity of homebuyers reduces demand for new construction projects.
In addition, material costs for builders remain high and the nitrogen problem has increased the package of requirements for new construction. Solar panels and heat pumps often need to be installed in new buildings. Problems with the energy infrastructure are also a factor. Electricity grids have reached maximum capacity in many places, and new homes and businesses cannot be connected unless they are expanded at the same time. But material and personal shortages make these investments more difficult.
ABN Amro added that there are some bright spots. Housing demand remains structurally important. In addition, we are flooded with orders from construction companies for energy conversion and renovation of existing buildings.