Dutch unregulated housing sector rents on the rise again
Prices of rental properties rise by 2.5 percent
Pararius quarterly rental report Q3 2021
The average square metre price of rental properties in the Dutch unregulated sector rose by 2.5 percent in the third quarter of 2021 compared to a year ago, according to figures from property portal Pararius. During the previous four quarters, rents in the unregulated sector have been falling as a result of Covid-19, but this quarter saw a price increase.
|Pararius quarterly rental report
|The figures apply to:
|- The number of properties removed from listings on Pararius.nl during the third quarter of 2021;
|- Unregulated rental properties (rent starting at €752,33 per month);
|- Rental properties that became available for new tenants;
|Necessary differentiations designated in the unregulated sector between shell1, upholstered2 and furnished3.
Property portal Pararius distinguishes three delivery forms for rental properties: shell, upholstered and furnished. In the third quarter of 2021 new tenants paid 2.7 percent more for a furnished home than a year ago: € 18.99 per square metre per month. Upholstered rental properties rose 2.9 percent in price, with new tenants paying € 15.98 per square metre per month while the square metre price of shell rentals fell by 4.9 compared with last year; new tenants paid € 12.60 per square metre per month.
Percentage price increases were not only measured at national level. At provincial level the unregulated housing sector rents also rose compared with the same quarter last year.
Rents rose most rapidly in percentage terms in provinces outside the Randstad4. In the following four provinces outside the Randstad, rents rose by more than 6 percent: Flevoland (+9.2%), Groningen (+8.4%), Gelderland (+6.5%) and Noord-Brabant (+6.7%)
According to Randy Tuitman of Tuitman Vastgoed, the demand for rental housing in the Dutch unregulated sector in Groningen has increased considerably since the beginning of summer, especially in Groningen’s capital (also called Groningen). “There’s a shortage of affordable rental housing and hardly any new supply is being added. Not for students, but also not for young couples or expats looking for a rental property. In addition, if a purchase ban comes into effect, investors will be prevented from buying certain properties for rent. If properties can no longer be bought to let, the shortage of affordable rental homes will only increase, causing rents to rise even further.”
In the provinces Noord-Holland and Zuid-Holland, rents for properties in the Dutch unregulated sector rose by 1.7 and 2.7 percent respectively.
The absolute price difference between the provinces remains notable. For a rental home in Noord Holland, new tenants paid an average of € 20.84 per square metre per month in the third quarter of 2021. This amounts to 1,667 euros per month for a home of 80 square metres, which means that Noord Holland remains the most expensive province in the Netherlands to rent. The average square metre price is mainly borne by relatively expensive cities such as Amsterdam (€ 22.44), Haarlem ( € 18.54) and Amstelveen (€18.68).
In Drenthe, the cheapest province, new tenants paid an average of 785 euros per month for an 80 square metre home. Prices in this province fell slightly: at € 9.82 per square metre per month, new tenants paid 1.8 percent less than a year ago.
Rents in Zeeland also fell: new tenants paid 7.1 percent less than a year ago: € 11.62 per square metre per month.
The Netherlands’ five largest cities
In the five largest cities in the Netherlands - Amsterdam, Rotterdam, The Hague, Eindhoven and Utrecht, also known as the G5 - rents rose in the third quarter of 2021 compared with a year earlier.
Amsterdam is still the most expensive Dutch city to rent a home. Rents rose by 1.6 percent in the past quarter. New tenants paid an average of € 22.44 per square metre per month.
Jasper de Groot, CEO of Pararius: “The expat market performs like never before and the short stays that were offered on the regular rental market during Covid-19 are disappearing from the market again because tourism is on the increase again. This, together with the already existing scarcity of unregulated sector rental housing, is the cause of the recent price increase.”
Last year expats stayed away from the Netherlands because of the corona virus, so rental properties that would normally be let to expats remained vacant. This led to a price drop when those properties were then reduced in price to allow them to be rented out after all. Now that travel restrictions have been largely lifted, rents in popular expat cities such as Amsterdam are rising again. This also became apparent when BNR newsradio made inquiries to brokers and relocation companies.5
Amsterdam at district level
Price increases were measured in all Amsterdam districts except Amsterdam Oost. The largest percentage price increase took place in Amsterdam Nieuw-West: here rents rose by 4.1 percent and new tenants paid € 18.71 per square metre.
In Amsterdam Centrum, the most expensive part of the capital, prices rose by 2.2 percent. A rental home here cost an average of € 24.22 per square metre per month in the third quarter of 2021, which was more than seven euros over the national average. With a square metre price of € 18.23, the Zuidoost district is the cheapest district of Amsterdam. Rents here rose by 3.7 percent.
Unregulated rents of properties in Rotterdam rose by 1.9 percent compared with last year. New tenants paid an average of 16.36 per square metre per month.
In the Prins Alexander district rents still fell slightly (-0.8%), while in all other districts in Rotterdam prices rose in the past quarter. With a square metre price of € 13.52, Prins Alexander is also the cheapest neighborhood in Rotterdam to rent a home. The center of the port city is the most expensive: here new tenants paid an average of € 18.43 per square metre per month in the third quarter of 2021. This is an increase of only 0.2 percent compared with the previous year.
Eindhoven, Utrecht and The Hague
With a square metre price of € 14.85, Eindhoven is the cheapest G5 city. Rents rose by 8.1 percent in the past quarter compared with last year. In Utrecht and The Hague, rents rose by 5.2 and 1.9 percent respectively. The rent for new tenants in Utrecht was on average € 18.38 per square metre per month, in The Hague tenants paid € 16.30.
Pararius distinguishes between three types of housing: apartments, single-family homes and detached houses. The average square metre price of apartments increased by 1.5 percent in the third quarter of 2021 compared with last year. New tenants paid € 17.73 per square metre per month.
Single-family homes also rose in price: tenants paid 3.4 percent more than last year: € 13.55 per square metre per month. The rental price for detached houses decreased by 1.4 percent in the third quarter of 2021 compared with a year ago, meaning that tenants now pay an average of € 14.40 per square metre per month for a detached home.
Percentage price increases were measured in almost all living area categories last quarter. Only the square metre price of Dutch unregulated sector rental properties between 175-200 square metres fell in percentage terms: at € 14.86 per square metre per month, new tenants paid 1 percent less than last year.
Unregulated sector rental properties in the living area category of 75-100 square metres rose 1.7 percent in price, with new tenants paying an average of € 16.90 per square metre per month. Rents of properties between 60-75 square metres rose by 1.4 percent compared with last year. A house in this category cost an average of € 19.52 per square metre per month.
Housing shortage in the Netherlands remains
In the third quarter of 2020, rents in the Netherlands fell for the first time in six years, and the following quarters also saw a decline in percentage terms. The arrival of Covid-19 proved to be a direct catalyst for this. According to De Groot, this was partly due to expats staying away. Vacated rental properties were less easily let, especially in the higher segment, so they were then priced more attractively to prevent vacancy.
According to De Groot it is now obvious that this was a temporary effect. “On the English version of our website, pararius.com, the number of contact and information requests from expats has increased enormously, so it is only logical that rents have risen again in the past quarter.”
The fact remains that the rental market is overheated and stuck, a temporary pandemic will not change that. In order to relieve pressure on the housing market politicians appear to focus mainly on increasing the social housing stock. According to De Groot, this is not the right approach to solve the housing shortage.
The share of social rental housing in the Netherlands is already excessively high: a third of all properties in the Netherlands are social rental housing (33%), compared to 7 percent of the unregulated sector rental housing.6 De Groot: “The demand for rental housing in the middle segment is enormous and this creates a large gap between social housing and the unregulated sector rental housing. More should be invested in increasing the housing stock in the Dutch unregulated rental sector.”
Due to the current skewed housing distribution, many home seekers have no way out. De Groot: “In the third quarter of 2021 a home for sale cost on average 419,000 euros.7 Home seekers with a middle income have little chance on the owner-occupied market. However, they earn too much to claim social housing and are therefore dependent on the very scarce private sector rental segment. Additionally there’s a large group of people who want to move on but cannot. These are, for example, people with a middle income who now live in social housing and remain there due to the lack of an affordable alternative. This in turn means people on lower incomes are prevented from entering social housing. In short: the gap between the social and the unregulated rental sector is widening and the measures currently on the table do not offer a satisfactory solution.”
Explanation of calculations
The figures in this rental report are based on 13,815 properties that were removed from listings on Pararius during the third quarter of 2021. The condition in which a property is rented (shell, upholstered or furnished) and the type of rental property greatly impact the average rent per square metre. All figures shown relate to rental properties that were offered on Pararius.nl and were removed from listings during the relevant quarter and thus became available to new tenants. Only homes where more than 30 measurements could be taken over the entire quarter were included in the calculations. Rental properties with a living area of less than 60 square metres (with the exception of the specific share of rental properties in the unregulated market with a living area between 50 and 75 square metres) and larger than 300 square metres and with a rental price below €752.33 were not included in the calculations because these rental properties are allocated to the Dutch social housing sector.9 Rental properties which stated "price on request" were not included in the calculations. No distinction was made in the calculation between homes, apartments, detached houses, studios or rooms, unless stated otherwise.
Average rental price per square metre per month
The average rent per square metre per month of a rental property is equal to the monthly rent divided by the living area (in m2) of the relevant property.
The surface area for all rental properties is between 50 and 300 square metres. Not one property lists its price on request. All 10 above-mentioned properties are therefore included in the calculation.
Average rent per m2 per month: (Sum of rent p/m2 - p/month) / (number of rental properties) = €164.67 / 10 = €16.47 per m2 p/month.
Pararius is the largest independent website for rental properties in the Netherlands. Pararius brings together tenants and landlords. Over 4,500 professional organisations advertise their available rental properties on Pararius. These organisations consist of real estate brokers, property management companies, developers and housing associations throughout the Netherlands. The website welcomes more than 2.5 million visitors every month. Visitors have free and unlimited access to the supply of over 60,000 properties. Pararius is multilingual and is also the largest expat rental platform in the Netherlands for the more than 350,000 expats working in the Netherlands.
This rental report is powered by Realstats.
This means that the rental property is rented without furniture, floors, lighting and blackout facilities.
This means that the rental property is rented without furniture, but with floors, lighting and blackout facilities.
This means that the rental property is rented fully furnished.
The Randstad covers a large area and includes four major Dutch cities: Amsterdam, Rotterdam, The Hague, Utrecht, and their surrounding area