Investment in new housing projects in the Netherlands plunged to €282 million in the second quarter of 2022, according to new research from property consultancy CBRE.

In the first quarter, investments totaled €777 million and the long-term average is around €664 million, CBRE said. ‘Investment in new build residential property has only been as low as the last quarter twice in the past seven years,’ the researchers say.

Investors had warned that the government’s plans to slap rent controls on far more residential property would have an impact on new development.

‘There is a risk that the government will fully regulate rents in the mid market price range, impacting on both rents and maximizing rent rises,’ CBRE said. ‘This uncertainty is disastrous for new investment.’

Housing minister Hugo de Jonge announced in May that he plans to expand the current rent control system, based on points for size, location and amenities, to more housing and set an upper limit of €1,000 to €1,250.

He also hopes to ensure some 900,000 new homes are built in the Netherlands by the end of the decade.

However, CBRE said that the increase in regulation, coupled with high building costs, the increase in local rules and planning issues would put paid to a large number of new residential developments.