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Sharp rise in homes for sale, but concerns over ‘mismatch’ and ‘shrinkflation’ in new construction

Sharp rise in homes for sale, but concerns over ‘mismatch’ and ‘shrinkflation’ in new construction

The Dutch housing market has seen a substantial increase in both existing and new-build home listings, offering buyers more negotiation room and choice. However, sales for new construction projects are declining as high building costs lead to smaller, more expensive units that often fail to meet buyer needs.

The supply of homes for sale in the Netherlands has significantly increased, with NVM data showing a 25 percent rise in existing homes and the highest level of new-build inventory since 2015. While this expanded choice allows buyers more time for viewings and negotiations, concerns are mounting over a mismatch between market demand and current new construction projects. High prices and rising building costs are driving a trend the NVM calls 'shrinkflation,' where buyers pay the same price for smaller living spaces, complicating sales for developers.

Despite the broader selection, new-build sales have actually declined compared to last year. Potential buyers are hesitant due to high interest rates, long construction timelines, and economic uncertainty. Experts warn that if developers continue to raise prices to cover increasing construction costs while prices in the existing housing market stabilize, new-build projects risk pricing themselves out of the market entirely.

Based on reporting by ad. Translated and condensed by LocalHeadlines.

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