By Sameer Mehta, Paulo Salla and Lennart van de Kamp

Housing shortage in the Netherlands has grown at an annual 6% since 2014, surpassing 400 k homes in 2024. As various strategies are being implemented to combat this crisis, prefab construction has emerged as an increasingly interesting tool in the mix of promising solutions. With expectations of reaching a 50% share of new residential builds by 2030, and even beyond by 2040, prefab is one of many solutions to keep an eye on. In this study, we have explored the developments within the prefab housing market in collaboration with industry expert Marjet Rutten, who has been tracking this market since 1996.

Current Market Developments

Since 2018, prefab housing production has been on a continuous trajectory of growth. Just four to five years ago, prefab housing accounted for only 10% of all residential new build in the Netherlands. By 2023, that share had reached 20%, with prefab housing maintaining the solid growth trajectory it had been enjoying since 2018. Last year, however, overall new build activity in the residential segment dropped by 6%, and prefab production declined by 5%. Despite this, we did see a marginal increase in prefab's penetration level in 2024, reaching a 21% share up from 20% in 2023.

Short-Term Outlook

Looking ahead, the market sentiment among prefab housing producers is optimistic, with expectations of a 53% increase in output for 2025. However, historical data suggests that forecasts often overestimate production, leading to a more conservative adjusted projection of 16.2 k units in 2025, a 13% increase from 2024. Aside from this adjustment, there is still significant growth potential, with current capacity allowing for nearly 37k units—or even up to 56k units if producers implement further enhancements.

Notable Statistics for 2024

Prefab housing is not only more environmentally efficient, but also cheaper, increasingly design-flexible, and more automated. In 2024, most prefab homes constructed were apartments, and most were sold to housing corporations. The houses were predominantly made of wood, modules were almost equally split between 2D and 3D, and homes with over 30% biobased materials accounted for 22% of total units

Key observations include:

• For both ground-level homes and apartments, prefab construction achieves higher environmental efficiency than is mandated.
• The majority of prefab housing players estimate that prefab production costs are equal to or cheaper than conventional building methods.
• Despite perceptions otherwise, prefab housing concepts offer flexibility in multiple aspects. Everything from façade design and the floorplan to how energy is utilized in the space can be customized to some degree.
• Prefab housing players, especially the larger ones, are achieving relatively high levels of automation .
• Most players put sustainability and biobased materials at the top of their lists as they continue to develop their companies and processes.

Conclusion

The consensus among industry players is that prefab construction should account for 50% of all residential new builds by 2030 and even beyond in the long term. Housing and labor shortages in the Netherlands underscore the necessity of prefab and other levers being pulled by the construction industry and governments. Players also maintain that these targets are feasible – and the numbers back them up. Today's 21% penetration share implies plenty of room for growth, and given current capacity volumes among players, that growth can be realized.

For a deeper dive into the findings and insights from our collaboration with Marjet Rutten, we invite you to download the full Report and explore how prefab construction can shape the future of housing in the Netherlands.