Dutch housing and mortgage market Q2 2026

New construction and the housing shortage

The Dutch new-build market presented a paradoxical picture in the first half of 2026. On paper, the construction pipeline is improving: in the first quarter, permits were granted for around 23,500 new homes, some 4,700 more than a year earlier, and the stock of permitted but not yet completed homes grew to approximately 226,600. Yet actual completion moved in the opposite direction. Only around 13,700 new homes were completed in the first quarter, fewer than in both the previous quarter and the same period a year earlier. According to CBS, the gap reflects a structural problem: it is taking increasingly longer to build homes once a permit has been granted, and a share of permits is subsequently withdrawn. The disconnect is also visible on the sales side, where the number of newly built homes sold fell by around 19% year-on-year, the third consecutive quarterly decline. New construction is therefore doing little to relieve the underlying shortage.

Grid congestion: a new bottleneck for construction

Alongside the familiar obstacles of construction costs, permitting times and nitrogen restrictions, a further constraint has moved to the foreground: growing pressure on the electricity grid. Rising consumption, the electrification of heating and transport, and the growth of decentralised generation have pushed the network beyond capacity in a growing number of regions. In February 2026, grid operator TenneT warned of a possible connection freeze in Gelderland, Utrecht and the Flevopolder, and later confirmed a temporary connection pause for most of the province of Utrecht from 1 July 2026. A new prioritisation framework by the ACM now places all applications in congested areas on a single waiting list, with housing given priority over commercial activity. A project can therefore hold a valid permit and still stall for want of a grid connection. In Utrecht, the most acute case, the municipality estimates that around half of the 23,000 homes planned by 2030 could be left without a connection, facing delays of several years even where permits are in place. The constraint is concentrated in the regions of greatest housing demand, and grid reinforcement takes years. It is a further reason to expect the structural shortage, and with it the resilience of the Dutch housing market, to persist over the medium term.

The buy-to-let market: a shifting picture

The exit of private landlords from the Dutch housing market, a defining structural trend of the past two years, continued into the second quarter of 2026, though it now appears to be approaching its peak. The sale of former rental properties remains an important source of supply, particularly of smaller and relatively affordable homes in urban areas. This wave is expected to lose momentum in the second half of the year, as the temporary rental contracts that prompt many of these sales expire following the 2024 restrictions. As that pipeline runs down, the supply of these cheaper former rental homes, priced on average around €390,000 and concentrated in urban areas, is likely to decline. With new construction still constrained, competition for these affordable homes, first-time buyers foremost among them, is likely to intensify in 2027.

New legislation aimed at retaining rental supply

Policymakers are responding to the continued erosion of the private rental stock. In April 2026, the Minister of Housing announced a package of five measures intended to optimise the Affordable Rent Act (Wet betaalbare huur), aimed at improving the investment climate and keeping landlords in the rental market rather than selling. On 16 June 2026, the House of Representatives approved three adjustments to the housing valuation system (WWS), which effectively raise the maximum permitted rents for part of the mid-market segment. These have been referred to the Council of State for advice, with intended entry into force on 1 January 2027. Two further measures, an extension of the temporary new-build surcharge and wider access for students to fixed-term contracts of up to two years, will follow through separate legislative routes. While it is too early to assess their effect, the direction of policy marks a notable shift, from measures that discouraged buy-to-let ownership towards targeted incentives intended to preserve mid-market rental supply.

House prices

Dutch house prices continued to rise on an annual basis in the second quarter of 2026, though the pace of growth remained moderate. The CBS house price index stood at 155.9 in June, an increase of 5.0% compared with a year earlier and 1.2% higher than the previous quarter. The average purchase price reached €496,235 in June, some 4.6% higher than a year earlier.

Despite the record volume of homes brought to market in the second quarter, competition among buyers not only persisted but intensified. Around 71% of homes still sold for more than the asking price, and the average amount paid above asking rose from 3.7% in the first quarter to 4.6% in the second, while the average time to sell fell from 31 to 28 days. Buyers keep bidding more aggressively and acting faster even as supply reaches record levels, which underlines how strong underlying demand remains. Beneath the surface, the market is increasingly differentiated by quality: energy-efficient, well-maintained homes continue to sell rapidly, whereas homes with a poor energy label or deferred maintenance increasingly linger on the market.

Overall, the picture is one of a market that is normalising rather than cooling. The record inflow of supply has taken the sharpest edges off price growth, but with demand still firmly outpacing the structural availability of homes, the underlying dynamics remain those of a tight market.

The 10-year fixed-rate period remained the most commonly selected term, accounting for around 69% of total mortgage volume in Q2, broadly unchanged from the previous quarter. NHG-backed mortgages accounted for approximately 33% of total volume, in line with recent quarters, supported by the continued availability of relatively affordable former rental properties within the NHG threshold of €470,000.

The distribution of new origination shown above also includes mortgage porters and further advances on existing mortgages, who typically carry equity from their previous home, purchase above the NHG threshold, and previously opted for longer fixed-rate periods. When this group is excluded and only genuinely new origination is considered, the dominance of 10-year fixed-rate and NHG-backed mortgages is even greater: the 10-year share rises to nearly 80%, and NHG-backed mortgages account for close to 44% of new production, as shown in the figure below.  
 

A widening gap between house prices and mortgage debt

The affordability pressures described above are reflected directly in how purchases are financed. According to HDN, the average value of a purchased home rose to €532,100 in the second quarter, up 5% year-on-year, while the average mortgage amount rose only marginally to €376,600, up 1%. The widening gap between the two reflects a market in which buyers rely more and more on their own funds to complete a purchase, rather than on borrowing alone.

This growing reliance on own funds reflects a steady rise in the underlying cost of entry. Because affordability for a new buyer depends on prevailing prices and mortgage rates rather than on a loan taken out years ago, the share of income required to purchase has climbed from around 31 per cent in 2019 to 42 per cent by the second quarter on an annuity basis, among the highest levels since the 2008 market peak. The renewed increase this quarter reflects the higher mortgage rates noted earlier, which reduced borrowing capacity even as prices continued to rise, leaving new buyers to bridge a larger part of the purchase from their own resources.

Interest-only and the tightening squeeze on older homeowners

The supervisory-driven shift in interest-only mortgage policy described in our Q4 2025 quarterly update has now been adopted across the major banks. Rabobank, ASN Bank, ABN AMRO and more recently ING, have reduced their maximum interest-only component to 30% of the property value, typically capped at around €150,000. This has a significant impact on borrowers refinancing their existing interest-only mortgages. Consider a 57-year-old couple with a combined income of €120,000 and an existing interest-only mortgage of €250,000. Under the new rules of the major banks, they can carry over only €150,000 of that amount when moving home. The remaining €100,000 must be converted to a repayment mortgage, raising net annual mortgage costs by almost €1,750. For applicants aged 57 and above, the requirement to test affordability against projected pension income adds a further constraint on top of the cap itself.

Banks are now also applying the same logic to the products designed to help retirees release housing equity. In June 2026, within two weeks of lowering its interest-only cap, Florius stopped offering new equity release mortgages (verzilverhypotheken) altogether. An equity release mortgage is in essence a fully interest-only product, and it is precisely this type of long-dated exposure that supervisory pressure is encouraging banks to reduce, leaving only a handful of providers in an already thin market. This comes at a moment when housing wealth among older homeowners is unusually concentrated: the mandatory annuity repayment regime introduced in 2013 means later generations of homeowners increasingly own their homes outright, and those aged 67 and above now collectively hold more than €500 billion in housing equity, around 60% of it entirely mortgage-free. For this generation, holding substantial wealth but limited liquidity, the tools to convert that equity into income are narrowing at the very moment demand for them is rising, a theme DMFCO explored in its whitepaper "Asset Rich, Cash Poor: The Dutch market for equity release mortgages".

The consequences reach beyond individual households. When higher costs discourage older owners from moving, the family homes they would otherwise release stay occupied, adding to the supply constraints set out in the housing market section rather than easing them. That effect is already showing in behaviour: according to De Hypotheker, home-improvement applications from owners aged 55 and above have risen by around 90% year-on-year, as a shortage of suitable senior housing leads them to adapt their current homes instead of moving.

The restrictions are meeting growing resistance from two directions. Among professionals, a survey of 288 mortgage advisers conducted for Lloyds Bank found that 89% were negative about the limits on interest-only lending and that 91% felt the emphasis on reducing risk had come at the expense of consumer choice, with more than a quarter reporting clients who abandoned a move or a change to their mortgage as a result. On the consumer side, Vereniging Eigen Huis has pressed for a bank-funded voucher giving homeowners access to free independent advice before they adjust their mortgage, pointing to research in which most homeowners were unaware the rules had changed and had never been told by their lender what the consequences would be. The objection is not that interest-only lending should go unconstrained, but that a blanket retreat withdraws a product that remains well suited to specific groups, particularly older owners with substantial equity.

The retreat of the banks says less about the product than about how it sits on their balance sheets. Interest-only and equity release loans run off only slowly, and supervisors increasingly see the resulting concentration of long-dated exposure as a risk they want reduced. Investors with long-dated liabilities of their own, such as pension funds and insurers, are not subject to the same supervision and can hold that exposure comfortably. A retreat driven by bank supervision is therefore not a verdict on the underlying demand, which is real and, as the population ages, growing. The AFM looks at the question differently again, not from a bank-supervision angle but from the consumer's, asking whether this kind of financing suits the borrower. The more constructive outcome is a better-matched market, in which lenders funded by long-term capital serve the borrowers for whom an interest-only or equity release solution remains suitable.