'50 percent new housing should come from factory'

Bouw en Installatie Hub
July 01, 2024
2 min

Far fewer new homes were built in the first quarter of this year than in previous years. This is bad news for home seekers. As a result, the tightness on the market continues to increase and house prices also continue to rise. The prodution capacity of factories must therefore increase substantially, ING expert Jan van der Doelen believes.

About 15 percent of all new housing currently comes from the factory. By building even more industrialized, the construction industry can contribute to a necessary acceleration. 'It is time for larger-scale and intensive cooperation to achieve more industrialization with risk spreading,' says Jan van der Doelen, sector specialist Building & Construction at ING Sector Banking

Scaling up

'Boosting production capacity to, say, 50 percent can help achieve more affordable housing faster. In factory construction, machines, robots and digitalization can take the place of an employee. In this way, the construction industry can overcome the shortage of personnel.'

Van der Doelen continues: "In a predictable world, scaling up works fine. But in the construction world, it's a lot more complicated. The dependence on external factors such as interest rates, laws and regulations and available locations is high. Also, producing to stock is far too costly. In fact, margins in construction are thin. This is due to the large number of (different) suppliers.'

Time for collaboration

Investing in factory construction is costly and time-consuming. There are now several initiatives in this area in the Netherlands with a wide variety of approaches, all on a relatively small scale. This is a wise choice from a risk management perspective.

'But we will not achieve the necessary scale-up if each continues to reinvent its own wheel. It is therefore time for more intensive and large-scale cooperation between builders, investors and other stakeholders. So that in addition to spreading risk, the viability of production sites is also increased. The potential benefits of this are scale and greater efficiency, but also reduced vulnerability because third-party production can then be achieved.'

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