Rental price decline trends in largest Dutch cities - real estate data
Sharp fall in prices in Amsterdam and Rotterdam city centre
Pararius quarterly rental report Q1 2021
The average square-metre price of rental properties in the Dutch unregulated housing sector fell by 2.4 percent in the first quarter of 2021, compared to a year ago. New tenants paid €16.34 per square metre per month, according to figures from property portal Pararius.
|Pararius quarterly rental report|
|The figures apply to:|
|- the number of properties removed from listings on Pararius.nl during the first 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.|
Prices decline in five major cities
Pararius noted that for the first time prices have fallen in the five largest cities in the Netherlands. "Last quarter rental prices fell in Amsterdam, Rotterdam, The Hague and Eindhoven," says Jasper de Groot, CEO of Pararius. "This was not the case in Utrecht last quarter, where prices remained the same as the previous year." First-quarter results for 2021 show that the average rental price of properties in the unregulated sector in Utrecht, otherwise known as the Domstad, fell by 0.7 percent to €17.78 per square metre per month.
In The Hague, the average rent for a property in the unregulated sector fell by 3.5 percent to € 15.95 per square metre per month. Prices in Eindhoven dropped less drastically: in the first quarter of 2021 the average rent fell by 2.4 percent to € 14.08 per square metre per month.
Rents in the capital Amsterdam have been dropping since the second quarter of 2020 and this price decrease continues at the same rate: new tenants paid 7.4 percent less in the past quarter than one year ago. A rental property in the unregulated sector costs an average of €21.76 per square metre per month in the capital. Such a large percentage decrease in price has not been measured since Pararius first began monitoring rents (Q1 2011). The square-metre price in Amsterdam has not been this low for six years (Q3 2015).
Rents also fell in nearly all city sectors during the past quarter. In Amsterdam’s city centre new tenants paid 9.9 percent less than last year: €23.29 per square metre per month. Despite this price drop, Amsterdam city centre remains the most expensive area in the Netherlands for rentals. The least expensive rentals, relatively speaking, can be found in Amsterdam Zuidoost, where rents may still increase. New tenants paid 2.4 percent more than last year: €17.40 per square metre per month.
Tom Booij, owner of Booij real estate, indicates that furnished apartments, particularly in the city centre and Amsterdam Zuid districts, are no longer rented out as quickly as they were one year ago. "Our rentals on offer tend to be more expensive, centrally located properties with a lot of room. We’re noticing that since COVID-19, there’s a decreased demand from international customers such as expats and companies. If rental properties remain vacant for a longer period of time because it’s more difficult to rent them out, then it makes sense that the prices are lowered by the landlord", says Booij.
Price developments in Rotterdam are comparable to Amsterdam: compared to the first quarter of 2020, the average square-metre price decreased by 7.8 percent. A rental property in the unregulated sector cost €15.20 per square metre on average.
Within certain districts, both the rents and the ratio between price increases and decreases still diverge. For example, rents fell in Charlois (-5.4%), Delfshaven (-3.8%) and Hillegersberg-Schiebroek (-12.8%). The average square metre price also decreased for Rotterdam city centre, where new tenants paid €16.81 per square metre per month, a 14.4 percent decrease compared with last year. The Kralingen-Crooswijk and Prins Alexander districts showed rent increases by 3.8 and 2.5 percent, respectively.
Roderik Klarenbeek of G. Kok real estate agency, notes that the more expensive districts such as Hillegersberg-Schiebroek certainly have far fewer single-family detached homes now available for rent. “There’s always been a very limited number of single-family homes on offer here,” says Klarenbeek. “Some landlords who might have rented out their properties for a good price over the last few decades, are now deciding to sell their properties because of the current house-market boom. This means that now, there are even fewer single-family homes for rent. So current figures are mainly based on transactions for apartments in a lower price category.” This explains the extreme percentage price decrease in districts like Hillegersberg-Schiebroek.
The Randstad covers a large area and includes four major Dutch cities. The area between the cities, the so-called Green Heart, is a sparsely populated peat-meadow area. The Randstad consists of the four largest cities in the country: Amsterdam, Rotterdam, The Hague, Utrecht, and their surrounding area. It also includes Schiphol Airport and the Port of Rotterdam, the largest port in Europe. With a population of about 8.2 million people, the Randstad has one of the largest metropolitan areas in Europe. The actual borders of the Randstad have not been officially established.4
The Netherlands has a total of 12 provinces. In Zuid-Holland, where popular cities such as Rotterdam and The Hague are located, rentals fell by 3.5 percent. New tenants paid an average of €15.34 per square metre per month in the first quarter of 2021. In Limburg, the average rent in the past quarter was €11.39, a percentage price decrease of 1 percent, compared to the same quarter a year earlier. Limburg is one of the less expensive provinces of the Netherlands.
There has not been a percentage decrease in price as significant as this in the province of Noord-Holland since Pararius first began monitoring prices in the first quarter of 2011, ten years ago. The average rental price of properties in the unregulated sector fell by 6.8 percent to €20.03 per square metre per month. Noord-Holland still remains by far the most expensive province in the Netherlands, as it includes Amsterdam and Amstelveen, both popular places to live among expats.
Rent decreases mainly occur in Noord- and Zuid-Holland, the most expensive Dutch provinces to live in. De Groot: “You can clearly see that we’ve reached the limit in the Randstad provinces.” The other nine provinces showed price increases last quarter. The largest price increase was measured in Zeeland. New tenants there paid about 7.8 percent more than in the first quarter of 2020. A rental property in Zeeland costs an average of €13.38 per square metre per month.
In the province of Flevoland, rents for properties in the unregulated market rose last quarter by 1.7 percent, compared to last year. New tenants paid €14.19 per square metre per month. The province has become increasingly popular in recent years, mainly due to the city of Almere. “Almere is conveniently close to Amsterdam and is a less expensive alternative in terms of rental properties,” according to De Groot. Almere’s rental properties in the unregulated market had an average square-metre price of €14.51 (+3.6%) in the first quarter of 2021, more than €7 less than the average square metre price in Amsterdam.
A total of five Dutch cities have an average square-metre price higher than the national average of €16.34. Three of these cities are located in Noord-Holland, which directly explains why this province is by far the most expensive province for rental properties. These five cities are Amstelveen (€17.58), Amsterdam (€21.76), Haarlem (€17.90), Leiden (€16.91) and Utrecht (€17.78).
Price development by housing type
Pararius distinguishes between single-family homes, apartments and detached houses. Pararius notes a percentage price decrease for apartments since the third quarter of 2020. In the past quarter, square-metre prices fell by 6.2 percent: new tenants paid €17.12 per square metre per month. The average square-metre price of single-family homes rose by 1.2 percent to €12.89 per month. For detached houses, the average square-metre price fell to € 14.05 per month, 2.3 percent less than a year ago.
Pararius measured a percentage price decrease during the last quarter for all living-area categories. The square-metre price for rentals in the unregulated market between 175 and 200 square metres declined the most (-8.5%). Rental properties of 75-100 square metres, by far the most popular category at Pararius, saw prices fall by 4.1 percent. New tenants paid €16.16 per square metre per month in this living-area category. Rents for properties between 60 and 75 square metres, the second-most popular living-area category on Pararius, decreased by 5.6 percent compared to last year. A property in this living-area category cost an average of €18.95 per square metre per month.
Decreasing rental prices linked to absent expats
The decline in prices in the largest cities can be linked to the temporary absence of expats due to COVID-19. Amsterdam, Rotterdam, The Hague and Eindhoven are all cities where many expats settle. “Expats generally have a lot more to spend than the average Dutch tenant and they mainly rent properties in the highest segment. If the expats stay away, then those properties will remain vacant. In order to avoid this, expat properties are being offered at a lower rental price”, says De Groot. Also Amstelveen, a popular city among expats and located close to Amsterdam, showed a decline in rental prices during the first quarter of 2021 of 12.66 percent.
The Dutch-language Pararius website (pararius.nl) receives 2.5 million hits by Dutch property seekers every month. Pararius also has an English-language version, pararius.com, which is frequently visited by foreign expats coming to work in the Netherlands. The impact of COVID-19 can be clearly seen on pararius.com. De Groot: “The number of website visits decreased by 19 percent in March 2020 compared to the same month in 2019. During the summer months the number of hits increased again, but the impact of the pandemic and ensuing uncertainty is clearly visible.”
“At the moment we’re seeing the number of information requests on pararius.com increasing again, but viewing requests still lag behind. So we can cautiously conclude that expats are now again showing interest in the Dutch rental market, though viewings remain down because the expats are not actually in the Netherlands yet.”
Dutch rental market out of balance
Price developments in the rental housing market are in line with expectations. “The rent ceiling has now been reached in many large cities and COVID-19 reinforces this effect. People cannot and do not want to pay more, so rents are stagnating,” says De Groot.
The fact remains, however, that the Dutch housing market is struggling with a large housing shortage. According to ABF Research, the Netherlands has a shortage of more than 300,000 properties.5 De Groot thinks that political initiatives aimed at bringing the housing market more into balance do not address root causes. “Supply and demand within the rental market are out of balance. There are too many social housing units and too few rental properties in the unregulated market." And that is where the problem lies, because increasingly more people earn too much to qualify for social housing, but too little to buy a home. “Of all households in the Netherlands, 12.5 percent earn a median income of between €39,000 and €55,000 annually. That amounts to more than 1 million Dutch families. This group needs to find rentals in the unregulated market, yet only 7 percent of the total properties on offer (570,000 homes) are in this sector.”6
Explanation of calculations
The figures in this rental report are based on 13,890 properties that were removed from listings on Pararius during the initial 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.7 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 property portal in the Netherlands for the more than 350,000 expats working in the Netherlands.
- 1 This means that the rental property is rented without furniture, floors, lighting and blackout facilities.
- 2 This means that the rental property is rented without furniture, but with floors, lighting and blackout facilities.
- 3 This means that the rental property is rented fully furnished.
- 4 Worldatlas.com, Where is the Randstad?
- 5 NOS, Schreeuwend tekort aan woningen, wat moet eraan gedaan worden?
- 6 Pararius, Huurmonitor 2020 Q4: Opnieuw dalende huurprijzen in vrije sector
- 7 Dutch Government, Social housing and private sector housing