Escalating scarcity in the Dutch unregulated housing market (2024)

Persistent price increases across the Netherlands

Pararius Quarterly Rental Report Q2 2024

In the second quarter of 2024, the availability of rental properties in the Dutch unregulated housing sector saw a significant decline of 32.8 percent from the previous year, as reported by property portal Pararius. Concurrently, the average price per square metre for these properties rose by 9.9 percent

Average national price per square metre

In the second quarter of 2024, the average price per square metre for rental properties in the Netherlands' unregulated sector climbed to €18.79, marking a 9.9 percent increase from €17.10 in the same quarter of 2023. This rise highlights the sustained pressure on the Dutch rental market, which is fueled by a constrained supply and robust demand, pushing rental prices upward.

Furthermore, during the same period, the average prices per square metre for apartments and single-family homes rose by 7.7 percent and 9.3 percent, respectively. Consequently, new tenants were paying €19.81 per square metre per month for an apartment and €15.00 for a single-family home.

In the second quarter of 2024, rental properties remained listed on Pararius for an average of 33 days, consistent with the duration observed in the second quarter of 2023.

Number of available rental properties

In the second quarter of 2024, the number of unregulated rental properties available for new tenants across the Netherlands fell to 14,673, representing a 32.8 percent decrease from the previous year and a 44 percent decrease from the second quarter of 2022. During the same period, 21,054 properties were delisted, significantly tightening the unregulated rental market. Consequently, prospective tenants had 6,381 fewer rental properties to choose from compared to the previous quarter.

In this quarter, the five largest cities in the Netherlands—Amsterdam, The Hague, Eindhoven, Rotterdam, and Utrecht—comprised 46.8 percent of the rental offerings on Pararius, compared to 41 percent in the second quarter of 2023.

Shift towards homeownership market

In the second quarter of 2024, properties originating from the rental market represented 7.8 percent of all properties for sale, up from 7 percent in the first quarter. Since the last quarter of 2022, there has been a steady increase in the number of properties for sale from the rental market, largely due to more private investors opting to sell rather than re-rent their vacant properties.

This trend is primarily driven by increased government regulation of the rental market1 and heightened tax burdens2.

Jasper de Groot, CEO of Pararius, remarks: “Since the first quarter of 2023, at least 8,000 properties have transitioned from the unregulated rental market to the purchase market. These figures are solely based on properties listed on Pararius; the actual number is likely three times higher.”

The NVM3 reports that property sales increased by 3.1 percent in the second quarter of 2024 compared to the previous year.

De Groot adds: “Despite governmental efforts aimed at stabilizing the housing market, we are witnessing the opposite effect in the unregulated sector. Rental prices are escalating, and the inventory of available properties is dwindling. This trend is largely driven by private landlords, who often view real estate as a means for retirement savings, pulling out of the market. Consequently, tenants reliant on the unregulated sector face dwindling choices. Furthermore, if these tenants consider moving to the purchase market, they are confronted with high entry prices; the average selling price of a rental property currently stands around €360,000.”

Average number of responses to a rental property

In the second quarter of 2024, rental properties in the Dutch unregulated housing sector received an average of 17 responses, a notable decrease from the 26 responses observed in the same quarter of 2023.

In Amsterdam, rental properties attracted 17 responses, down sharply from 37 the previous year. In Eindhoven, the count also stood at 17, a significant drop compared to 47 responses in the second quarter of 2023. In Utrecht, properties received 29 responses, a decrease from 52. The Hague saw a reduction to 35 responses from 40.

Rotterdam properties experienced a decline in interest with 32 responses, compared to 41 in the prior year.

Rent price development in largest cities

In the second quarter of 2024, the average price per square metre for rental properties in the unregulated sector increased in four of the five largest Dutch cities year over year. However, Eindhoven saw a 1.7 percent decrease to €17.93, remaining below the national average of €18.79.

In Amsterdam, the average price per square metre increased by 3.8 percent, resulting in new tenants paying €27.57 per square metre per month. The largest percentage increases occurred in The Hague (+8.1%) and Rotterdam (+8%), where new tenants paid €20.07 and €20.13 per square metre per month, respectively. In Utrecht, the price per square metre rose by 2.1 percent to €21.52.

Price development in medium-sized cities

Pararius also reports on rental price trends at a local level, specifically in areas where over 30 unregulated sector rental properties were delisted during the quarter. In the second quarter of 2024, the data reveals that the average price per square meter for rental properties in the unregulated sector increased in nearly 85 percent of the 75 surveyed locations compared to the same quarter in 2023.

In cities like Sittard (+6.9%), Heerlen (+7.7%), Hengelo (+9.1%) and Geleen (+6.3%) the average price per square meter was among the lowest, ranging from €12 to €13.

Cities such as Amsterdam (+3.8%), Zandvoort (+13.9%), Laren (+17%), Amstelveen (-0.8%), and Leiden (+6.3%) recorded the highest prices per square meter, all exceeding twenty-one euros. Amsterdam topped the list at €27.57 per square meter.

Several cities observed decreases in rental prices, including Diemen (-13.4%), Hoorn (-7.2%), Katwijk (-6.9%), Almere (-6.5%), Purmerend (-4.1%) and Nijmegen (-3.4%). These cities also posted prices below the national average.

Delivery forms in the Netherlands

Pararius categorises rental properties into three delivery forms: shell4, upholstered5 and furnished6. In the second quarter of 2024, rental prices varied significantly among these categories. A new tenant paid an average of €16.50 per square metre per month for a shell property, marking an increase of 18.6 percent from the same quarter the previous year. For furnished properties, the average rent rose by 12.2 percent to €22.95 per square metre. Meanwhile, upholstered properties saw a more modest increase of 4.5 percent, bringing the rent to €17.59 per square metre.

Size segments in the Netherlands

In the second quarter of 2024, an unregulated rental property in the smallest size segment (less than 75 square metres) cost an average of €23.28 per square metre per month, an increase of 9.4 percent compared to the previous year. Rental properties in larger size segments had a square metre price below the national average. For instance, a rental property between 75 and 100 square metres cost €18.40 per square metre (+9.8%), and a property between 100 and 125 square metres cost €15.75 per square metre (+9.4%). New tenants paid €15.27 per square metre per month for properties between 125 and 150 square metres, marking an increase of 10.6 percent compared to last year.

Dutch Provinces

In the second quarter of 2024, rental property prices in the unregulated sector across all Dutch provinces showed an upward trend compared to the previous year. The northern provinces of Drenthe (+16.7%), Friesland (+10.6%) and Groningen (+9.1%) saw the largest increases. Drenthe experienced the most substantial rise, with prices climbing to €13.43 per square metre per month. In Friesland, prices reached €12.58 per square metre, while Groningen reported rates at €17.25 per square metre. Despite these hikes, prices in these regions remain well below the national average.

In the northern provinces of Flevoland (€16.27), Overijssel (€13.67) and Gelderland (€14.34), new tenants also paid more than a year ago: specifically, 0.9%, 4.4%, and 7% more, respectively.

In the southern provinces of the Netherlands, compared to a year ago, percentage price increases were also measured in the second quarter of 2024. In Noord-Brabant (€16.35), the square metre price increased by 8.1 percent, while in Limburg (€14.27), prices rose by 4.3 percent. In Zeeland, the square metre price increased to €13.72 per square metre per month, a rise of 3.5 percent compared to last year.

In the so-called Randstad provinces7, the average square metre price is significantly higher. In both Noord-Holland (€23.99), Zuid-Holland (€19.24) and Utrecht (€18.95), the prices are above the national average. Rental prices in these provinces increased by 6.7, 8.1, and 4.5 percent, respectively, compared to a year ago.

About Pararius

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 70,000 properties. Pararius is multilingual and is also the largest expat rental property portal in the Netherlands for the more than 350,000 expats working in the Netherlands.

Explanation of calculations

The figures in this rental report are based on 21,054 homes that were removed in the first quarter of 2024 after being offered for rent online. The condition in which a home is rented out (shell, upholsterd or furnished) and the type of rental home (apartment, single-family home, detached house) have a major influence on the average rent per square metre.

Looking at the distribution of the rental supply in the Netherlands, 23% of the total unregulated sector rental stock is let by institutional investors. These are mainly rental properties that are offered as a shell (without upholstery and furniture). The remaining 77% of the housing stock is let by private investors. These are rental properties that are mainly offered upholstered and/or furnished. The Pararius quarterly rental report is compiled on the basis of approximately 105,000 rental transactions in the unregulated sector on an annual basis. About 15% of the rental transactions in the quarterly rental report concern shell rental properties and 85% concern furnished and/or furnished rental properties, which corresponds to the distribution in the Netherlands. The composition and the Dutch coverage of these rental transactions provide a representative picture of the breakdown in the Dutch unregulated rental market. As a result, the quarterly rental report provides a reliable picture of rent development in the Netherlands.

All figures shown relate to rental properties that were offered in the Netherlands and that were removed in the relevant quarter, thus becoming available to new tenants. Only places where more than 30 measurements could be taken over the entire quarter were included in the calculations. Not included in the calculations were properties with a living area of less than 40 square metres or more than 300 square metres, or with a rent below €763.47 (liberalisation threshold from 1 January 2022 at 146 points). Rental properties offered with 'price on request' were also not taken into account in the calculations. In the calculation, no distinction was made between houses, apartments, detached houses, studios or rooms, unless stated otherwise.

Average rent per square metre per month

The rent per square metre per month is equal to the monthly rent divided by the living area (in m2) of the relevant home. The average rent per square metre is based on a harmonic mean of the rent per square metre of all homes over which the average is calculated.

To mitigate the impact of outliers on the mean, the calculation of means is done over the values that fall between the 2nd and 98th percentiles (inclusive, calculated over full dataset).

In the above example, it is noted that the surface area of all rental properties falls between 40 and 300 square metres. None of the properties are listed with a price upon request. There is one property where the rent per square metre is higher than the 98th percentile (€37.50) for this quarter: rental property 10. This rental property is not included in the calculation of the average, while the other 9 properties are.