The housing shortage in Groningen is currently estimated at approximately 7,400 homes, and by 2025, that is projected to increase to 10,000 homes.
Those are the findings of an annual national survey by
Capital Value, a specialist in the residential investment market, in collaboration with ABF Research. Elderly citizens and younger people starting out on the property ladder in Groningen in particular are impacted by the persistent shortage.
Young city
Due to the presence of the University of Groningen and the Hanze University of Applied Sciences, the city of Groningen is one of the
youngest places in the EU: in January of 2020, nearly a quarter (23%) of the people living in the city were between the ages of 15 and 29.
As of this year, that translates into around 52,500 households, approximately 18,900 of which are living sub optimally in so-called “inhabited other space”, which is shared housing that does not technically qualify as a single household, such as a student house, a rented room in a building or a non-residential building.
And
foreign students in particular are disproportionately impacted, due to their lack of social connections to help pass along any vacancies that do exist, very limited opportunities to view listings in person, and straight up discrimination with listings – illegally – saying that foreigners need not apply.
As reported by the
GIC, due to the shortage of available mid-market rental housing and long waiting lists for social housing, it is particularly difficult for this target group to move on to the regular rental market.
Senior citizens
Too little new housing has been built in recent years, in particular senior housing designed for the limited mobility of residents. That is exacerbated by a demographic trend in the Netherlands: according to the Social and Culture Planning government agency, by 2030, there will be more than 2 million people in the Netherlands above the age of 75 (12% of the total population).To put that explosive growth in perspective, in 2018, there were 1.4 million people in this age group (8% of the total population).
The lack of options in the private rental sector for senior citizens to downsize to as they age is backing up the market, according to Capital Value: more suitable rental units for the elderly will free up more larger properties, which will in turn give starters and families a chance to take over the vacant owner-occupied homes.
New builds
In 2021, approximately 125 million euros was invested in rental homes in the province of Groningen and construction is underway for more affordable rental homes in the region, such as the
Crossroads project in the northwest of the city with 290 rental apartments and 19 quayside homes are being built.
The city of Groningen also committed to a
construction plan in 2019 to create 20,000 new homes by 2030, seeking to develop the areas at the
Suikerunieterrein (although that project is currently on hold) and Eemskanaalzone.
According to Capital Value, more new builds will inevitably reduce the rising housing shortage, and ultimately help curb the enormous increases in rental and purchase prices in the Groningen region. The rental investment specialist also says that the national government will need to continue making extra capacity possible.
Social housing
Part of the bottleneck is due to Dutch
social housing policy, which is designed so that people can continue living there indefinitely as long as their income level remains stable.
That means that fewer people leave social housing and enter the private market, but that is in turn due to the lack of affordable private market rental options to move on to.
The home sales market is also overheated, and Groningen is one of the most competitive markets in the country: housing prices are currently rising at the fastest rate in more than 20 years.
Nationwide, the average increase was 15%, but in Groningen, it was 17.4%. In the third quarter of 2021, that average sale price of a home was nearly 420,000 euros, and most homes sold after only 23 days on the market.
