Dutch housing permits hit 10-year high, but construction still slow off the ground
The Dutch construction sector is experiencing a rebound in building permits, reaching a ten-year high, which generates cautious optimism for future housing construction. However, per the full note from ING, the expected increase in permits is unlikely to translate into a rapid rise in actual housing starts due to significant delays often encountered in the building process. As a result, while the overall construction volume is projected to stabilize by 2026 with a modest increase thereafter, the current construction activity remains subdued. The broader implications for the EUR may hinge on these domestic economic signals, especially if they affect policy decisions by the European Central Bank moving forward.
What the desk is arguing
The desk interprets the rising number of building permits in the Netherlands as a potential precursor for future construction activity, albeit one that will materialize slowly. Specifically, the record issuance of 10,628 permits in May, while a promising sign, underscores the persistent lag in housing starts that typically trails permits by 10,000 to 15,000 units annually.
Moreover, expectations for housing completion suggest only approximately 71,000 new homes will be constructed in 2026, gradually increasing to 74,000 in 2027, leaving more room for a cautious approach from investors. The desk recognizes that any robust rebound in actual construction is still muted by planning and economic variables often beyond the sector's control.
Where it sits in our coverage
Currently, our consensus target for the EUR/USD pair is set at 1.075, with expectations range between 1.04 and 1.12. Notable targets from other institutions include: - jpmorgan: 1.10 by Mar26 - bofa: 1.04 by Mar26
Given this context, the desk's call is more optimistic than bofa, aligning closely with jpmorgan, suggesting potential upward movement in the euro if housing construction stabilizes more robustly than expected.
How other firms see it
Most firms seem to share a cautious outlook regarding the Dutch construction sector, favoring a gradual recovery similar to our take. However, bofa stands out with a more bearish perspective, suggesting a slower-than-expected rebound.
Traders should keep an eye on the EUR/USD trajectory as it parallels broader sentiment and potential actions from the ECB. Economic metrics from the housing market may serve as crucial indicators influencing future monetary policy approaches.
How firms align with this view
Aligned with the desk view
Contrary positioning
Key takeaways
- 01Dutch housing permits reached a ten-year high, with 10,628 issued in May 2023.
- 02Construction activity is expected to stabilize only by 2026, reflecting a slow recovery in actual housing building.
- 03The backlog of permits suggests that housing starts typically trail by 10,000 to 15,000 units each year.
- 04EUR/USD may be sensitive to future construction trends impacting local economic sentiment and ECB policies.
Market implications
Investors should watch for movement in EUR/USD around the consensus target of 1.075, especially as further data on construction activity are expected to influence longer-term economic outlooks. Additionally, any shifts in the ECB's stance may correlate with developments in the housing sector.
Risks to this view
A significant catalyst for reversing the current optimistic sentiment would be a marked deterioration in the broader economic indicators or a prolonged slowdown in housing starts beyond current estimates, which could prompt dovish adjustments by the ECB.
Articles Dutch housing permits hit 10-year high, but construction still slow off the ground Published 08:55 Manufacturing, Construction and Retail The Netherlands Share X LinkedIn E-mail Copy link Share X LinkedIn E-mail Copy link Download The Dutch construction sector is expected to stabilise in 2026 after a weak start to the year. In 2027, building volume will grow slightly again, mainly because more building permits issued will gradually lead to more housing construction. Nevertheless, the recovery remains limited Maurice van Sante More building permits are set to support a gradual recovery in Dutch housing construction, though growth remains modest More permits, but no quick breakthrough yet In May, 10,628 building permits were issued for new-build homes, the highest monthly number since the start of the current measurement method in 2015.
However, permits do not translate directly into new homes. Projects can be delayed while homes are sold, plans revised, or permits renewed. As a result, the number of housing starts typically trails the number of permits issued by 10,000 to 15,000 each year.
Number of building permits on the rise again Number of Dutch new-build homes, rolling annual total per month up to and including May 2026 Source: CBS, ING Research "> Source: CBS, ING Research 71,000 new-build homes in 2026 and 74,000 in 2027 In the first four months of 2026, 7% fewer new-build homes were built than in the same period last year. That shortfall will need to be recovered over the remainder of the year, which is why we expect only a modest increase to around 71,000 completed homes in 2026, rising further to 74,000 in 2027. Infrastructure sector remains an important driver, but growth is levelling off The infrastructure sector remains the strongest subsector within Dutch construction.
The outlook for the infrastructure sector is also positive. Since 2020, production in the infrastructure sector has shown persistently high growth rates, with volume growth of 10.5% in 2025. However, we do expect volume growth to be much lower in 2026 and 2027.
The growth rate in the infrastructure sector is slowing down due to high construction costs, staff shortages, nitrogen restrictions and limited government budgets. Because of these limited budgets, the government has decided to prioritise maintenance instead of new construction. The recent closure of the Merwede Bridge for trucks due to overdue maintenance also shows that this is needed.
However, production levels in the infrastructure sector remain high – they are more than 40% above the level of five years ago. Construction output falls in first half of 2026 Volumes Dutch construction sector in value added (index Q2 2019= 100) Recovery remains fragile Total Dutch construction production contracted by around 1% in both the first and second quarters of 2026. This means that construction has lagged behind the growth of the Dutch economy as a whole since the beginning of 2024.
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