Netherlands

Overall construction activity

After several years of growth, overall construction activity took a significant downturn last year. The total construction output decreased by 3% in 2024. The decline in production was predominantly observed in new residential and non-residential construction, which saw a sharp fall due to an earlier decrease in the number of issued building permits.

The outlook on overall construction activity for this year is significantly better. The total construction output by volume is expected to grow by 1½% in 2024. Key drivers of this expected growth include the increase in granted permits as well as the substantial investments in both improving the energy-efficiency of properties and strengthening the energy grid.

Residential construction

Residential construction output decreased by approximately 2½% in 2024. Especially the construction of new dwellings declined sharply as a result of fewer granted permits in previous years. In addition, the average construction value per permitted dwelling decreased in 2024 since housing developers focused more on building small collective dwellings. In 2025, the outlook for new residential construction is expected to improve. The substantial increase in issued permits in 2024 will lead to a rise of completed dwellings in 2025. The rising housing prices particularly provide the financial capacity for developers to build more residential properties. Although the number of completed dwellings is expected to rise in 2025, it will not be sufficient to reach the government’s target of 100,000 new dwellings per year.

After years of high growth, the renovation of residential properties decreased by 1% in 2024. This decline is mainly due to the saturated demand for sustainable improvements in both individual and multi-family dwellings. Particularly the demand for solar panels and heat pumps fell in 2024. In 2025, residential renovation is expected to stabilize. Growth figures will once again be lacking as a result of decreased investments in energy-efficient and sustainable dwellings.  

Non-residential construction

Non-residential construction decreased by 5% in 2024. This overall decline in output was partly the result of unfavourable developments in the construction of new retail stores and health care buildings. The demand for new retail stores declined as bankruptcy rates grew and vacancy rates increased. Furthermore, health care organizations faced challenges with the construction of new buildings as the government reduced public expenditures allocated for this purpose.

After years of substantial growth, renovation on non-residential properties fell. This is primarily the result of declined investments in energy-efficient non-residential buildings as gas prices fell, the demand for solar panels decreased and issues regarding grid congestion grew. The increased available subsidies for sustainable improvements and the enforcement of the energy label C requirements for non-residential buildings, however, helped to offset this negative trend. In 2025 non-residential renovation is expected to see a slight increase. The growth will be mainly driven by the construction of educational buildings, as the increased DUMVA subsidy will provide an incentive for schools and universities to make their buildings more sustainable