IMF urges the Netherlands to boost housing construction

The International Monetary Fund (IMF) is once again emphasizing the need for the Netherlands to accelerate its housing construction. According to Alfred Kammer, Director of the European Department at the IMF, the housing shortage means young people in several European countries, including the Netherlands, are increasingly unable to purchase homes.

The IMF expert stated during the IMF’s annual meeting in Marrakech that this situation affects urban populations and is detrimental to the economy. He highlighted that, despite significant rises in housing prices over recent years, there has been limited new construction in many European countries. He believes construction should be a “priority” now.

Kammer already urged the Netherlands to increase the housing supply during last year’s IMF annual meeting. At that time, he pointed out that the high Dutch housing prices could not be explained solely by the prolonged low mortgage interest rates.

Last year saw a decline in housing prices, influenced by rising mortgage rates. However, that decrease has now ended, prices are stabilizing, and there is a slight upward trend. The IMF believes this shift is largely due to the limited housing supply.

Earlier this week, IMF director Paul Hilbers, an executive director of the IMF, also voiced the need for more homes to be constructed in the Netherlands. He warned that the reduced affordability of homes might become a social problem in the country. Large segments of the population could feel they no longer have a chance to buy a home, especially as prices begin to recover after months of decline and borrowing becomes harder due to higher mortgage rates. Hilbers suggested that such dissatisfaction might also result in resistance to reforms.