High rent in Dutch cities driving Dutch average rental price hike

The average free sector rent paid by tenants in the Netherlands now stands at 1 thousand euros per month. This is even higher in the four large Dutch cities, where tenants pay an average rent of 1,154 euros per month, Rabobank economists said in a report published on Wednesday, NU.nl reports.

This means that the national average rent is currently at the upper limit of 1 thousand euros for the middle segment. The middle segment is defined by homes with rents between 720 euros and 1 thousand euros per month.

Rents across the Dutch market increased significantly over the past years. In 2012 and 2015, rents in the free sector still averaged at around 900 euros. Last year they rose to nearly 1 thousand euros. In the four large cities - Amsterdam, Rotterdam, The Hague and Utrecht - the average rents were well above 1 thousand euros last year.

Housing associations offer the lowest rents, with tenants working through a housing association paying an average of between 800 euros and 900 euros per month. This may have to do with the homes having a lower quality, according to the Rabobank economists.

The Dutch housing market needs a larger middle segment to make it function better, the economists said. While this topic has been discussed in politics, little has been done about it thus far. Politicians proposed introducing a maximum limit for rents, but the economists doubt whether this will work. A maximum on rents will mean less return for investors, which in turn could result in them investing less in new construction.