The real estate investment market is cautiously recovering. Savills reported an investment volume of €3.3 billion in Q1 2026, led by residential and healthcare real estate. CBRE expects further growth in investment volumes in 2026. However, capital is more selective than before. Projects with uncertain permitting, high energy dependency or weak operating assumptions are facing greater challenges. Three issues dominate: affordability, energy management and urban densification. In addition, further policy changes are expected from the Dutch government in The Hague.
The Dutch national government aims to deliver 100,000 homes annually. Of these, two-thirds should be affordable, with 30% designated as social housing. This changes the market’s underlying approach. A developer working from the assumption of maximum sales revenue can run into difficulties in a system where municipalities and provinces have a stronger say. The Housing Governance Strengthening Act (Wet versterking regie volkshuisvesting) is intended to give government authorities greater powers to determine how many homes are built, where they are built and for whom. For project developers, this means that discussions about land value need to start earlier. There is less scope to absorb cost overruns later through higher-priced homes. Affordability therefore becomes central to the business case. Developers need to make sharper choices about whom they are building for and what level of quality is financially viable. Factors such as parking, dwelling size, energy concepts and shared facilities can make or break a project. In 2026, more activity is expected in housing segments with a clear social need, such as student housing and senior living. This fits with the broader trend towards increasingly selective capital.
Energy Management
Energy availability and permitting capacity have become fundamental development requirements. Grid congestion is affecting not only industrial sites and data centres, but also residential development. In April 2026, Bouwend Nederland warned that approximately 240,000 planned homes through 2035 could be at risk because a connection to the electricity grid may not be available in time. For developers, this is an uncomfortable reality. A location may have strong planning potential yet still become stalled because the necessary grid connection is unavailable. Nitrogen regulations add another layer of complexity. According to Bouwend Nederland, 244,000 homes could be affected by nitrogen restrictions. Projects require more extensive legal preparation, cleaner construction logistics and stronger substantiation of emissions. Nitrogen considerations therefore need to be part of the initial feasibility assessment. Energy requires the same early attention. When developing a new neighbourhood, developers need to consider how residents will cook, charge vehicles, heat their homes and feed electricity back into the grid without placing excessive pressure on the local network. This leads to different choices in phasing and operations. Batteries, collective heating systems and local management of peak demand are becoming increasingly important components of area development.
Densification
Project development is increasingly shifting towards existing urban areas and existing buildings. New construction remains necessary, but space is becoming scarcer and planning procedures are demanding. As a result, interest is growing in conversion, rooftop extensions and more intensive use of existing buildings. This is not limited to converting obsolete offices into housing. Retail properties, business parks and community facilities are also being reconsidered. Platform31 points out that urban densification puts pressure on the space available for other functions. This makes area development more complex, as housing has to compete with workspace, amenities and the circular economy. With new construction on an undeveloped site, much of the focus is on design and market positioning. With existing buildings, the process starts with constraints. Structural conditions, ownership, tenancy agreements and the surrounding area determine what is feasible. The financial headroom is often smaller, while the technical uncertainty is greater. Nevertheless, this is where significant potential lies. A building that already exists usually already has an established place within the city. Infrastructure may already be in place, and public opposition can sometimes be lower than when building on undeveloped land. The challenge lies in finding a programme that fits the existing structure and the surrounding neighbourhood.
The Hague
Project developers can expect significant political influence from The Hague over the coming six months. The Housing Governance Strengthening Act is intended to give the national government, provinces and municipalities greater powers to steer the number and location of new homes. This makes the principle of two-thirds affordable new-build housing, including 30% social housing at regional level, increasingly important for area development. At the same time, the government is seeking to accelerate procedures through additional funding for municipalities, stronger permitting processes and greater emphasis on conversion, rooftop extensions and subdivision. There is also growing pressure to make industrialised and standardised housing construction faster and easier to implement. The STOER programme aims to remove unnecessary or conflicting regulations and limit additional local requirements that go beyond statutory standards. For developers, this could help reduce project timelines and costs, particularly for standardised, repeatable concepts. For the mid-market rental sector, measures are expected to make investment more attractive, including an extension of the new-build premium. The downside is that plans with a large proportion of market-rate housing and limited affordable provision are becoming more politically vulnerable.
