The Dutch government has been urged to improve the investment climate for the housing market, as the Dutch Pension Federation argued that this could "pave the way" for long-term investments by pension funds in affordable housing.

Dutch Pension Federation chairman, Ger Jaarsma, acknowledged that Dutch pension funds are already investing in affordable Dutch housing, including through listed shares and by issuing mortgages.

The federation also agreed that it is in the interest of all residents in the Netherlands to combat the housing shortage, suggesting that the pension sector bears the brunt of the housing construction challenge and is aware of the need for more investments, particularly in affordable housing.

“Pension funds primarily exist to organise a good pension for workers and pensioners. At the same time, we in the Netherlands are facing a number of major social challenges," Jaarsma stated.

"Among other things, in the area of ​​the housing shortage. This will require substantial investments in the coming years."

However, the federation warned that due to factors such as increased interest rates, high land prices and sharply increased construction costs, investments in affordable housing are becoming 'increasingly difficult'.

Whilst new construction projects are still getting off the ground, the federation said that the circumstances for pension funds are becoming increasingly challenging.

Given this, the federation suggested that a better investment climate is needed to help make it more attractive for pension funds to invest in housing, calling for long-term government policy and the removal of hindering factors.

In particular, the federation urged the government to reduce the transfer tax rate from 8 per cent to 6 per cent, to apply the lower VAT rate on new-build homes, and to create more building land.

It also encouraged the government to introduce shorter and simpler permitting processes, and to guarantee new construction projects access to the energy grid.

Jaarsma argued that these "concrete proposals" should help ensure that investments continue to contribute to a good pension for workers and pensioners.

“At the same time, we have explained from the outset that pension funds cannot simply make a ‘commitment’ for a certain number of homes to be built or a specific amount of money to be invested," he added.

"In order to achieve a good return for workers and pensioners, a good balance in the investment portfolio is crucial. New investments must fit into this balance."

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