By Sameer Mehta and Paulo Salla
Amid the persistent construction market and eventual housing challenges in the Netherlands, prefab construction is gaining traction due its rapid time-to-market and reduced labor requirements. Since 2015, the housing shortage has grown by approximately 7% per year, bringing the total shortage to around 400,000 homes in 2025. A broad set of measures is being deployed to address this challenge, ranging from regulatory reforms to sector- and municipality-level incentives. Within this toolkit, prefab construction is becoming an increasingly important lever. With expectations of reaching a 30-40% 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 the Ministry of the Interior.
Prefab housing output increased strongly from 2018 to 2023. Although overall residential construction volumes declined in 2024, prefab’s share still increased slightly. In 2025, prefab returned to growth in both absolute terms and market penetration, reaching 21.2% of total residential construction. Prefab’s share of Dutch residential new-build has shifted materially over a short period. From 10.0% five years ago, it reached 21.2% in 2025. Moreover, after a slight decrease in production in 2024 when penetration increased only marginally, prefab recovered and strengthened its position in 2025. While total residential construction flattened in 2025, prefab production grew by 8%, lifting prefab’s share of new-build by a further 1.5 percentage points.
Sentiment among prefab players remains positive. For 2026, producers anticipate increasing output by 34%, building more than 19,000 housing units. This confidence is broadly shared, as roughly 90% of respondents indicate that they expect higher production levels in 2026 compared to 2025. However, historical data suggests that forecasts often overestimate production, leading to a more conservative adjusted projection of 16,100 units in 2026, a 10% increase from 2025. Even on this adjusted view, there remains significant headroom. The corrected projection corresponds to roughly 45% capacity utilization, similar to 2024, against an estimated sector capacity of close to 35,000 units.
The majority of prefab players indicate that prefab housing is cheaper than traditional construction, with the majority of respondents stating it is 10–20% cheaper. Furthermore, prefab is increasingly used for apartments (across low-rise, mid-rise, as well as high-rise ), with apartments now representing the majority of prefab housing. Prefab also offers a high degree of flexibility in facade finishing and overall design.
Key observations include:
Residential prefab players broadly agree that prefab should account for 50% of all new residential construction by 2030, and potentially up to 80% in the longer term. At the current pace, however, prefab’s share is projected to reach only 30–40% by 2030, falling short of the target.
Despite this gap, players remain optimistic. Prefab offers clear benefits in cost and speed, while increasingly meeting market demand through a growing share of apartments and flexible facade and design options. Current production capacity among players is sufficient to support further growth. Achieving the 2030 target will require collective effort and coordination across the sector, supported by government and stakeholder initiatives.
The Prefab Homes Radar will continue to track these developments, providing insights into how the sector advances.
Explore how prefab construction could help ease the Netherlands’ housing shortage—plus the latest on market growth, key trends, and what’s ahead.
