Fear of new-build deadlock in 2023

Housing market investment volume sees dramatic fall

Rising interest rates and uncertainty about government policy are threatening to cause further decline and delays in new housing in 2023. The investment value of the housing market in 2022 was €3.7 billion, significantly lower than expected. This is according to the CBRE Outlook report, published today. The real estate advisor is warning of a situation similar to the housing crisis faced by the country from 2008 until 2013.

Much of the potential supply of investment dried up during the second half of the year. For many projects, this was mainly the result of the rising cost of funding, but uncertainty with regard to the announced rent controls was also a key issue. The impact of that can be seen in the investment volume, which was lower in 2022 compared to the long-term average of 46%.

New-build deadlock
The first signs of falling prices can be seen in the investment market for residential rental properties and the new-build owner-occupied market is responding in a similar way. The owner-occupied housing market is changing from a seller’s to a buyer’s market, mainly due to rises in mortgage interest rates and increasing economic uncertainty. Thomas Westerhof, Head of Residential Investment at CBRE: ‘Diminishing returns on new-build projects on the one hand and high land and construction costs on the other mean that the new-build housing market faces potential deadlock.’ ‘This is compounded by the proposed rent controls that will place pressure on existing stocks of affordable rental housing if investors increasingly resort to selling off individual units.’

Housing market requires flexibility
Westerhof: ‘It is expected that housing associations and investors will be able to compensate for the falling demand on the private owner-occupied market to some extent – but the flexible programming of new-build projects will be essential if that is to happen.’


About CBRE 
CBRE Group, Inc. (NYSE:CBRE), a Fortune 500 and S&P 500 company with headquarters in Dallas, is the world’s largest commercial real estate services and investment firm (based on 2020 revenue). The company employs more than 100,000 people worldwide and provides services in over 100 countries. CBRE offers strategic advice and guidance in property sales and leasing; corporate services; property, facilities and project management; appraisal and valuation; development services; investment management; and research and consulting. Please visit our websites at and