Private sector in free fall as landlords continue to dump rentals; 65,000 sold last year
The private sector rental market in the Netherlands is dwindling as investors continue to sell their rental homes into the owner-occupied market. Last year, investors sold a massive 65,000 rental properties, RTL Nieuws reported from figures from the Kadaster, the Dutch Land Registry.
Investors also bought 27,000 newly constructed rental properties, partly due to Dutch pension funds commissioning more expensive rentals. All in all, the total private sector rental stock fell to 752,000 homes, equivalent to 9 percent of the total housing stock.
The Netherlands’ private sector is tiny compared to the owner-occupied sector (around 60 percent) and the social housing sector (28 percent). But many people depend on it. The private sector is a refuge for people who earn too much to qualify for social housing, but too little to afford to buy a home.
Because social housing is scarce and each unit has a waiting list, many who qualify also end up in the private sector. As do people who are going through a divorce, for example, or migrant workers. Many student housing units are also in the hands of investors.
Between 2016 and 2022, investors bought many homes to rent out. But that trend changed after 2022 because rental homes became less profitable in the Netherlands. Several cities have banned investors from buying rentals in certain neighborhoods, the government started regulating mid-market rents, and investments are being taxed more heavily.
As a result, landlords decided en masse to sell their rentals when the tenant moved out rather than renting them out again, and the number of private sector rentals, homes available without a waiting list, is shrinking. According to the Kadaster, landlords have now sold 17,000 more rental properties than they have bought in the past 10 years. Nationally, 16 percent of homes sold last year were previously owned by investors. In the four large cities, it was a third.
First-time buyers, in particular, are benefitting from the sell-off. Because the former rentals are typically smaller, cheaper apartments, the average price is much lower than the average transaction price of another home in the Netherlands. Last year, former rentals sold for an average of €360,000. The average price for an owner-occupied home was €502,000.
The new Dutch government, which took office on Monday, has announced plans to revise several regulations that impact landlords. For example, the government wants to stop municipalities from closing off certain neighborhoods to investors, called purchase protection. The government also wants to relax the Affordable Rent Act, which has been regulating the rent for mid-market homes since 2023.
These plans are stated in the D66, VVD, and CDA’s coalition agreement. It is not clear when or how the government plans to implement them.
