How can the housing market better adapt to demographic changes?

Approximately 3.3 million people in the Netherlands live alone, accounting for 19% of the population, according to CBS statistics. In 1960, this figure was just 3%. What has driven the sharp rise in single-person households, and what does it mean for the housing market? We spoke with Frank van Weegberg, strategy expert at APG. "It’s a missed opportunity that the Netherlands failed to use demographic data to plan for appropriate housing needs."

The rapid increase in single-person households over the past few decades is largely due to the growing individualization of society, enabled by rising prosperity, Van Weegberg explains. However, not everyone living alone does so by choice. “Consider young people unable to secure family housing or seniors who have lost their partner. In today’s tight housing market, owning a home as a single person is increasingly reserved for the privileged few: expats and other high-income earners. Voluntarily living alone has almost become a luxury.”

A shortage of family homes

A glance at the market for newly built houses reveals a focus on large homes priced above EUR 800,000 and small apartments of 20 to 40 square meters, primarily aimed at young people. “Developers argue that mid-sized family homes offer lower profit margins. Four 50-square-meter units generate more revenue than two 100-square-meter houses. Consequently, the supply of typical family housing remains very limited”, Van Weegberg notes. Compounding the issue is that many older adults occupy homes that are now too large for them but remain attractive because of low rents or paid-off mortgages.

Van Weegberg acknowledges the growing demand for smaller homes due to increasing individualization. “Most new housing is around 30 to 40 square meters because that’s where developers can achieve the best margins. But the market seems overly focused on catering to individuals who want to live alone. The equally large group seeking family homes is left out. There’s significant demand for affordable homes and social housing between 100 and 150 square meters. The mismatch between supply and demand stems from the fact that these properties are less lucrative for developers and landlords.”

Aging population

CBS projects that by 2045, 3.8 million people in the Netherlands will live alone, compared to 3.3 million today. “This increase will largely be driven by the growing number of seniors aged 65 and older. In addition to individualization, population aging is driving the rise in single-person households, particularly as partners pass away,” Van Weegberg explains. At the turn of the century, the prevailing belief was that seniors preferred to stay in their homes as long as possible. Consequently, little emphasis was placed on housing specifically designed for this group. “In hindsight, this was a mistake. Even back then, the aging population signaled a future rise in demand for such housing. While it’s true that seniors want to live independently, that doesn’t necessarily mean staying in large family homes. Many would prefer smaller apartments or assisted-living units. This is where we’ve gone wrong. Remarkably so, since demographic trends are among the easiest societal developments to predict. It’s a missed opportunity that the Netherlands failed to use this data to plan for appropriate housing needs.”

Encouraging mobility with incentives

Van Weegberg suggests that the current housing stock could be better utilized by encouraging seniors to move into smaller homes. “Options like ‘knarrenhofjes’—shared housing communities with communal facilities to foster social cohesion—could be attractive. However, many seniors resist moving because they want to stay close to friends, family, and their familiar neighborhood. The government could help facilitate this transition by offering relocation incentives or practical moving assistance. Currently, large family homes often only become available when seniors move into care facilities or pass away.”

Rethinking housing priorities

Instead of focusing on small starter homes, developers should prioritize building compact homes tailored to seniors, Van Weegberg argues. “This would free up family homes for young couples who currently live in tiny apartments or container housing units.” He points to countries like Spain and Italy, where housing shortages often force young adults to live with their parents until their 30s. “The Netherlands is starting to resemble this situation. Rental properties are scarce, and starter homes are often unaffordable. This delays cohabitation and family formation. After all, living alone is not always a free choice.”