Private sector rents rising faster than owner-occupied home prices

Rents in the private sector rose faster than owner-occupied home prices in the first three months of this year, housing platforms Huurwoningen.nl and Pararius reported following an analysis.

According to the platforms, new tenants paid an average of €21.12 per square meter in the first quarter, 7.3 percent more than a year earlier. Apartments, in particular, became more expensive. Currently, over 42 percent of all available private sector homes have rents above €2,000 per month.

Statistics Netherlands (CBS) previously reported that existing owner-occupied homes became 5.4 percent more expensive in both February and January than in the same months last year.

According to Pararius and Huurwoningen.nl, the past quarter marked the second consecutive time that rental increases exceeded owner-occupied home prices and inflation.

The statistics agency recently reported that inflation in the Netherlands rose to 2.7 percent in March compared to a year earlier. In January and February, the cost of daily life increased by 2.4 percent in both months.

In the first quarter, nearly 13,000 private sector rental homes became available to new residents, but more were taken off the market. According to the platforms, on balance, 1,869 more homes disappeared from the market than were added.

Despite this, fewer responses were received per home. On average, there were 25, a decrease of 46 percent compared to a year ago, and the lowest number since the second quarter of 2021.

The platforms said that this does not automatically mean that competition in the tight rental market has decreased. According to them, the decreased responses are partly due to the reduced supply of affordable rental homes. “As a result, demand is concentrated on a smaller portion of supply, which keeps the pressure on that segment consistently high,” said Pararius.

Furthermore, the platforms reported that the wave of landlords selling off their rental properties into the owner-occupied market seems to be declining. In the first quarter, 5.5 percent of all sales listings on Parairus consisted of former private sector rental homes, down from 7.6 percent a year earlier. Stricter rental regulations and higher taxes have been causing a wave of rental home sales for some time.