Growth & housing

The Dutch population is growing rapidly, and Utrecht is growing with it, just like other (big) cities. Current urban planning aims for compact cities and building homes within existing city limits. Research shows that in a densifying city, quality of life often improves through investments in the quality of the living environment, facilities and accessibility. Utrecht has calculated a housing requirement of 60,000 additional homes for the period 2019-2040. Growth is not an end in itself but must be accompanied by sufficient affordable housing for everyone and a green and healthy living environment. Balanced growth (Groei in Balans), as set out in the Utrecht Spatial Strategy 2040 (RSU). In this feature article in the Utrecht Monitor 2024, we can see that this housing challenge is one of the major challenges of our time owing to a convergence of demographic and social developments. This feature article covers:

• Demographic developments
• Growth forecast
• Housing stock and housing market
• Quality of the living environment

Growth & housing

Demographic developments

Demographic developments are a key factor associated with the societal challenge of sufficient housing. This is not just about the predicted increase in the number of inhabitants of the Netherlands. The development of the number of households and one-person households is also important, as are an ageing population, the elderly living independently at home for longer and an increase in foreign migration.

In 2023, Utrecht experienced its strongest growth since 2009

Utrecht grew last year by 6,390 inhabitants to a population size of 374,374 on 1 January 2024. Slightly higher growth than in 2022, and the strongest growth since 2009. Utrecht is growing because the birth rate is higher than the mortality rate and because more people are settling here than departing. The number of households is also growing, from 181,400 in 2019 to 194,377 in 2024. 53% of these are one-person households. Utrecht has always been a city with many one-person households (large student population). In 2019, the percentage was also 53%.

Growth less than previously determined by births

In recent years, growth in Utrecht has been less determined by the number of births and more by the number of people settling here. As in the other G4 cities (Amsterdam, Rotterdam and The Hague), we see a declining birth rate in Utrecht. Last year, an exceptionally low number of babies were born: 4,118 (-830 compared with 2021). The lowest number since 2004. The number of women of childbearing age increased sharply during this period. Utrecht still has the largest natural increase (birth minus mortality) per 1,000 inhabitants of all major cities. Fewer and fewer children are being born throughout the Netherlands. In 2023, a woman had an average of 1.49 children (fertility rate). In 2010, this was still 1.79 children.

Utrecht is growing mainly as a result of foreign migration

34,611 people settled in Utrecht in 2023, and 30,051 left. This difference between inflow and outflow gives a net immigration figure of approximately 4,560 people. Utrecht is growing mainly due to people from abroad settling here (foreign migration). There was a record number of almost 11,000 immigrants in 2022. In 2023, immigration fell slightly to 9,362, although it is still a historically high figure. Regarding domestic settling and departures: in 2023, 25,274 people left Utrecht for other municipalities in the Netherlands. This is only 25 more than the number of people who moved to Utrecht from other municipalities, making this the lowest domestic emigration surplus since 2018. We mainly see more 18 to 24-year-olds coming to live in Utrecht, probably because of the reintroduction of the student grant in 2023.

Foreign migration: many highly skilled migrants

Migrants are a diverse group. Most migrants come to the Netherlands for work, study or love. In Utrecht, a significant part of this group consists of highly skilled migrants, also known as expats. For instance, many immigrants with Indian nationality have been coming to Utrecht for years (almost 750 in 2023). Many immigrants also come from the EU, in particular, those with a Spanish, Italian or German nationality (2023: some 500 people each). Refugees form a relatively small group of migrants. In 2023, the number of recognised refugees (asylum permit holders) in Utrecht increased from 2,659 to 2,738 (+79). Ukrainian refugees are a special group. In 2023, the inflow was +530. In 2022, this number was around 1,800. In both 2022 and 2023, around 400 people with Ukrainian nationality also de-registered.

The economic situation of young people means they postphone starting a family

A declining birth rate affects both growth and population composition. As mentioned above: the Netherlands has a declining birth rate. Recent research (NIDI, 2024) shows a link with the poorer economic situation of the current generation of young adults. They are better educated, are more often in productive employment, work more hours and are rarely unemployed. On the other hand, they more often have a flexible employment relationship, incomes that barely increase, student debt, little assets and live in expensive rental homes. As a result, they postpone having children and the birth rate decreases. This is a relevant fact for Utrecht as a young city.

Utrecht also has a growing elderly population

One demographic development we have observed (albeit delayed because Utrecht is a young city) is the growing elderly population. The number of people over 65 is set to increase sharply from 40,300 now to 60,800 by 2040. In percentage terms, this group is growing the fastest of all age groups (+51%). This creates major challenges, for example, in the area of informal care. Most informal care for people over 85 is provided by 50 to 75-year-olds. In 2024, there are 14 people aged 50-75 in the Netherlands for every person over 85. In 2032, there will be 10 and in 2036, only 8 (Statistics Netherlands/CBS).​ Housing construction also represents a challenge: older people have different housing needs.

Growth forecast

The population of the Netherlands is expected to continue to grow in the coming decades, to 20.7 million inhabitants by 2070 (CBS, 2023). Utrecht also makes an annual forecast for the growth of the city. It predicts the growth of the Utrecht population until 2040. We look at both the plans for new homes Meerjaren Perspectief Ruimte 2023 (Multi-year Outlook for Space ) and population developments, such as birth, mortality and the number of newcomers.

Utrecht is expected to grow to 473,000 inhabitants by 2040

According to the most recent population forecast (from 2023), Utrecht will pass the 400,000 population mark in 2029 and will have more than 470,000 inhabitants by 2040. This is an increase of almost 100,000 inhabitants over the next 16 years. The neighbourhoods of Zuidwest (+69% over 2024-2040), Oost (+46%) and Binnenstad (+45%) are seeing the most growth. When building new homes, Utrecht opts for infill, using new residential development sites in places within the city. This also increases the population density. Between 2001 and 2024 alone with more than 1,000 inhabitants per km² (from 2,600 to 3,800). The average population density is expected to grow again by 1,000 inhabitants per km² over the next 16 years.

State Committee advises on moderating growth in the Netherlands towards 2050

In 2023, the House of Representatives sought advice on the expected growth of the Dutch population by 2050. The State Committee Demographic Developments 2050 issued an advisory report entitled ‘Gematigde Groei’ (‘Moderate Growth’) in early 2024. In that report, the committee discusses growth scenarios towards 2050 and their consequences for space, the economy and public facilities. According to the committee, shaping moderate population growth is essential for prosperity in the Netherlands, which, in addition to material aspects, includes health, the environment, education and social cohesion. It advises policymakers to focus more on the desired size and forms of migration. Such national political choices could also have an impact on the future growth and composition of the number of inhabitants in Utrecht.

Housing stock and housing market

Cities are attractive and have been attracting more and more people, especially young people, in recent decades. The city attracts them like a magnet. They move to the city for education and often start a working career there (what’s known as the ‘escalator effect’). And now more than in the past, they stay in the big city and start a family. In addition, higher education attracts many foreign students, 24% of whom are still working in the Netherlands five years on, according to NUFFIC.

In 2023, the housing stock in Utrecht grew at a slower pace than in previous years

In contrast to the strong growth of the Utrecht population, the Utrecht housing market experienced a slowdown in the growth rate in 2023. The housing stock increased by just 1% last year (approximately 1,700 houses, completions minus demolitions and withdrawals). In the years from 2019 to 2022, the annual growth was still around 3,000 houses. In 2023, more than 2,100 new houses were completed in Utrecht. In recent years, the average number of completions has exceeded 3,000 houses. This significantly lower number is due to difficult market conditions after the COVID-19 crisis, including rising interest rates, inflation and high construction costs. They are causing problems for both investors and buyers. The construction of 2,573 houses began in 2023, more than twice as many as in 2022. Expectations are that many construction projects will start in 2024 as well. In the short term, the dip in the construction of new houses seems to be temporary.

Utrecht housing market: more rental homes, expensive houses and rising prices

In recent years, the share of owner-occupied homes in the total housing stock has fallen to 44%. This is because new houses have consisted mostly of rental houses in recent years. The sale prices of existing houses in Utrecht have risen sharply in recent years. As a result, values for the Valuation of Immovable Property Act (WOZ) are also rising, and the proportion of expensive owner-occupied homes (above the NHG limit) is increasing significantly. Previous price declines stopped again in 2023, but have been rising since the third quarter of last year. Rabobank and ING also expect price increases of between 4.0% and 4.5% for 2024. Households can apply again for higher loans thanks to relatively high increases in income. In addition, there is a persistently low housing supply.

Higher housing target for asylum permit holders and pressure on social care

For 2023, Utrecht was tasked with housing 792 asylum permit holders, a significantly higher target than in previous years. Of these, 434 asylum permit holders have been housed. The target for the first half of 2024 has been set at 384 asylum permit holders. With the backlog (243) built up over several years, Utrecht is faced with the task of accommodating 627 asylum permit holders in the first half of 2024. Many municipalities are struggling with the target because of a shortage of social rental housing. The housing of asylum permit holders is part of a chain that includes the provision of reception facilities to refugees. Owing to delayed outflow and new inflow as a result of the Dispersal Act (Spreidingswet) and Ukrainian refugees, Utrecht reception centres are currently under extra pressure.  

More problems lie ahead: an overloaded electricity grid

The electricity grid in the Netherlands is full; the grid cannot cope with the increased demand for electricity. We are experiencing grid congestion. This problem also affects Utrecht (Stedin, 2024), and for the time being it is not possible for large connections to deliver a surplus of energy back to the grid (solar arrays, large roofs with solar panels, wind turbines) or to supply them with energy (supermarkets, large-scale catering, offices, factories). Problems for small connections (houses) are also likely before 2026. Grid operators, government, province and municipalities are currently working on an emergency package of measures to avoid restrictions on new small connections (including smart charging of electric cars and smart heat pumps).

Quality of the living environment

In addition to sufficient housing, balanced growth is also about the liveability of the living environment, ample peace and quiet but also liveliness, plentiful green spaces and good accessibility. In a densifying city, these are elements that ensure that densification also benefits the city and the people who live there.

Expectations for the future of neighbourhoods are more negative 

The proportion of Utrecht residents who expect their neighbourhood to deteriorate in the future has been rising steadily over the past five years. While 11% of Utrecht residents had negative expectations for the future of their neighbourhood in 2018, that figure rose to 18% in 2023. This increase is most visible in the City Centre (from 14% in 2018 to 25% in 2023) and the neighbourhoods of Zuid (from 13% in 2018 to 28% in 2023) and Leidsche Rijn (from 10% to 21%). The ratings residents give their neighbourhood are stable in most districts. Only in the City Centre did the overall neighbourhood rating drop from an 8.0 rating in 2021 to a 7.7 in 2023.

Lower satisfaction with public transport and more nuisance caused by noise and waste/rubbish

Utrecht residents were slightly less satisfied with the public transport accessibility of their own neighbourhoods in 2023. In 2021, the figure remained at 83%, in 2023 this dropped to 79%. In the past year, the average amount of public green space available to a household in Utrecht also decreased slightly from 66 m² in 2022 to 64 m² in 2023. This is due to the growth in the number of inhabitants of the city, the completion of large residential projects and often a lack in the design of public space. Utrecht residents are also slightly less satisfied (72% in 2023) with the parks in their neighbourhood than in the pandemic year 2021 (75%). Satisfaction is back at the level of 2019. Residents may have been more satisfied during the pandemic because they made greater use of the parks. The number of Utrecht residents who are often inconvenienced by noise other than traffic noise or noise generated by businesses is increasing (18% in 2019; 24% in 2023). And finally, the percentage of Utrecht residents who are often inconvenienced by rubbish and waste on the street is also increasing (34% in 2019; 38% in 2023).