Private sector home rental prices rose to new record, analysts say
After a dip caused by the coronavirus, the rents for private sector homes are rising again rapidly. In the last quarter of 2021, new tenants paid an average of 5.3 percent more than a year earlier, according to housing site Pararius. Private sector rents are now 17.02 euros per square meter per month on average - the highest they've ever been since the measurement started in 2010.
"The increase is not surprising," said Jos de Groot, director of Pararius. "The demand is very high, and the supply is low. Then prices increase."
The rising prices for owner-occupied homes are fueling the rent increases. Many potential buyers can't afford a house so are forced to rent. As they earn too much for social housing, they end up in the private sector. Long waiting lists for social housing mean that people entitled to them also end up in the private sector. "The private sector is too small to absorb that," De Groot said. "And so prices are rising."
Private sector rents increased in all provinces. Noord-Holland is still the most expensive province to rent in, with an average price of 20.49 euros per square meter per month. However, rents in the province increased only marginally at 0.6 percent. The northern provinces of Drenthe (+16.1 percent), Friesland (+17 percent), and Overijssel (+10 percent) are the cheapest provinces to rent in with average prices below 12 euros per square meter.
Of the five largest cities in the Netherlands, private sector rents increased by below average in Amsterdam (+1.7 percent) and Utrecht (+2.9 percent). In both these cities, the average price per square meter is well above the national average of 17.02 euros. New Amsterdam tenants pay an average of 22.45 euros per square meter per month. In Utrecht, it is 18.33 euros. In The Hague (+6.7%), Rotterdam (+9.7%), and Eindhoven (+11.7%), the average price per square meter is below the national averate.
There were also some municipalities where rents decreased a bit. In Tilburg, new tenants paid 4.4 percent less than a year earlier. In Nijmegen, rents fell by 0.7 percent.