Soaring Costs Stall Dutch Construction Projects, Including New Housing

Mounting Costs Impacting Affordability

The sharp rise in construction expenses over the past three years is putting pressure on the affordability of new developments. Higher wages and stricter labor regulations—especially enforcement against false self-employment—have increased labor costs. This has led to fewer freelancers in the sector and a rise in permanent staff, further pushing up costs through pension and social contributions.

"Although there is a great need for new construction and renovation in the Netherlands, many projects are still pending," said Ted Peek of Arcadis. Developers are also being forced to accept lower profit margins or take on greater risks, making it harder to get projects started. In many cases, ongoing developments become more expensive midway through, and when cost overruns cannot be covered, the burden often falls on the contractors.

Construction Output Continues to Decline

The total construction output in the Netherlands dropped by 3% last year. Residential construction shrank by 5%, commercial building by 11%, and infrastructure construction by 1.5% compared to 2023. Since 2020, all sectors of construction have shown a steady decline, with residential building in particular lagging behind in 2024.

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