Political landslide in the Netherlands unlikely to lead to major changes in the construction sector any time soon
Political landslide in the Netherlands unlikely to lead to major changes in the construction sector any time soon
Briefing on European construction November 2024.
Briefing on European construction November 2024.
A new Dutch government has big intentions on building many more new houses, but its policies are largely the same as the last government. Taxing undeveloped land with a housing designation, getting rid of unnecessary regulations, and making deals with actors in the housing market space are unlikely to give an immediate boost to the housing sector. The government also has big intentions for a new railway and four new nuclear power reactors, but these projects are far from certain at this moment. The government will, however, end a law which in practice subsidizes homes with solar panels. In addition, the government will cancel the implementation of a rule that would have mandated heat pumps for most homes by 2027 (In the event of a gas boiler requiring replacement). These last two policy changes will likely have a negative impact on the growth, which was expected earlier for the housing renovations sector.
Arguably the biggest change in the Dutch national political landscape in more than 70 years, took place in December of 2023. An astonishing 36% of the seats in parliament changed hands, the largest percentage since 1945. When it is taken into account that the general voter sentiment put the current lack of housing in the Netherlands on a shared 1st place in the decision making for this election, one might expect the new government to go big on housing. So let’s dissect their new policies on housing and the building sector in general, and see what’s new.
The new government is a is a coalition of four parties, three of those parties have never been part of a government coalition before. In the coalition accords that the parties published after reaching a deal, the fourth point mentioned in the summary is “a large impulse in house building, infrastructure, accessibility [by public transport], and [the] energy transition”. When we look at the specifics which are supposed to add a large impulse to house building, there are a few new plans, but nothing major. Much like the previous government, there is a consensus that the Minister for Housing should play a directing role and should be able to place enforceable demands on lower levels of government to build more houses. For instance, the previous Minster of Housing had been escalating his demands on the province of Zuid-Holland to build more houses on the edges of cities and towns in order to achieve the new housing goals. In the new government’s accords it is mentioned that a tax on unsold land (which has a housing designation) will be instated. It is unclear how many such lands, that are not being developed on, exist. Certainly housing corporations say that one of the biggest reasons why they can’t build nearly as many houses as they have funds for, is a lack of suitable land with a housing designation.
In infrastructure building, the plans are largely the same as the last government. One exception is the stated intention to connect five extra stations in the north and east of the country [read: cities] to international high speed rail lines. Also there is the continued intention to construct the so called ‘Lelylijn’, a direct rail connection which would better connect the northern provinces with the west of the country. Several lines have been proposed, with estimated costs running from €8.2 billion to €17.2 billion. As of yet, only €3.4 billion has been reserved.
In the area of the energy transition, the biggest change is most definitely the intention to build not two new nuclear energy reactors (like the last government wanted to), but four. This would be done for the tune of €14 billion. Considering that the Netherlands hasn’t built any new nuclear energy reactors for quite a while and is thus missing a lot of expertise in this field, some experts have noted that the budget which has been set out, could very well be insufficient. A policy that is sure to have a quick impact on the housing renovation market, is the cancellation of a law intended to make heat pumps mandatory when a gas boiler needs to be replaced. This law was supposed to go into effect by 2026, and technical installation producers and installers had been preparing for this shift by building up their capacity to meet the coming challenge. An added negative impact on the home renovations market is that a lucrative subsidy rule for homes with solar panels will be scrapped from 2027. A surge in home battery installation can be expected, but this will not be able to make up for the decline in demand for solar panel installations.
Texten är skriven av Max de Lange, analytiker på EIB-Economic Institute for Construction and Housing. EIB är Nederländernas representant i det europeiska analysnätverket EUROCONSTRUCT.
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