Hundreds of thousands of new homes per year? A lot needs to be done if the Netherlands is to meet that government target, says BAM CEO Ruud Joosten. During the presentation of the half-year figures of the construction group on Thursday, he therefore made an urgent appeal to politicians: allow more large construction projects outside the city and argue less about zoning plans and permits.
Joost called the Dutch housing market an “important spearhead” of the group due to the structural shortage of homes, but at the same time sees that BAM was able to sell fewer homes in the past six months than in the same period a year earlier. While there were still 850 last year, the company now has 500 homes. The recent dip in the housing market also plays a role in this. The CEO attributes this to the rise in mortgage interest rates and high inflation, which leads to more expensive building materials and less room for house buyers to spend.
In June and July, BAM again managed to sell some more homes. Still, Joost thinks it will take some time before home construction is back on track. “House building will start, not next year but after that,” he expects. “And maybe not immediately that a hundred thousand homes are built in a year. But that ‘uptick’ is coming.” For the time being, that turnaround has not yet happened: 15,000 new construction permits were issued in the second quarter of 2023, Statistics Netherlands announced on Thursday. That is 5 percent less than last year.
Even more delay
If construction picks up again, BAM says it can double housing production, provided that more locations become available for construction. “Right now, most of the construction is happening in the inner city. These are often small projects with, for example, only thirty homes,” says Joosten. In political The Hague, several parties expressed their support for extra-urban construction, but the CEO does not feel that much is happening with this. According to him, the fall of the cabinet will cause even more delays. In addition to the nitrogen problem, major investors will also wait with their building plans until, for example, there is clarity about the policy for the rental market.
BAM itself presented disappointing results on Thursday. Profits fell by about 30 percent to 60.2 million euros compared to last year. In the Netherlands this was due to ‘design issues’ and cost overruns in four projects in Denmark. The turnover was 3 billion euros, compared to 3.3 billion euros in 2022. According to Joosten, most activities delivered a “satisfactory operational performance”, despite the “challenging” market conditions in the first half of the year. On the stock exchange, BAM’s share lost 1.83 percent and ended at 1.98 euros.
A version of this article also appeared in the August 18, 2023 newspaper.