Rental market supply in the Netherlands shrinks further

Sales wave of rental properties continues

Pararius Quarterly Rental Report Q1 2024

Compared to a year earlier, the number of rental properties in the unregulated housing sector available for new tenants has decreased by 27.9 percent. This is according to the data analysis by property portal Pararius. The average square metre price of a rental property in the unregulated housing sector has increased by 8.6 percent in the first quarter of 2024 compared to a year ago. On average, a rental property was listed online on the portal for 35 days, three days longer than last year.

Dutch average nationwide square metre price

In the first quarter of 2024, the average square metre price of a rental property in the unregulated housing sector rose to €18.30. This is an increase of 8.6 percent compared to the same quarter in 2023, when the average square metre price was €16.85. The ongoing pressure on the Dutch rental market, where limited supply combined with strong demand leads to rising rental prices, is thus emphasised.

In the Netherlands, a rental property was listed online on Pararius for an average of 35 days in the first quarter of 2024. That is 3 days longer than in the first quarter of 2023, when a property was listed for an average of 32 days.

Number of available rental properties

In the first quarter of 2024, a total of 17,594 homes became available for new renters throughout the Netherlands. This is 27.9 percent less than a year ago and even 38.5 percent less than in the first quarter of 2022. In the first quarter of 2024, 23,384 homes were deregistered from Pararius. As a result, this means that prospective tenants had 5,890 fewer rental homes to choose from in the past quarter.

The five largest cities in the Netherlands - Amsterdam, The Hague, Eindhoven, Rotterdam, and Utrecht - accounted for 45.3 percent of the total rental supply offered on Pararius in the first quarter of 2024. In the first quarter of 2023, 40.6 percent of the total rental supply consisted of offerings in the G5.

Shift towards homeownership market

The percentage of housing stock originating from the rental market rose to 7 percent in the first quarter of 2024. This means that 7 percent of all homes listed for sale in the first quarter were former rental properties.¹ Since the fourth quarter of 2022, the number of homes transitioning from the rental market to the sales market has been significantly increasing, partly because a growing number of private investors choose to sell their vacant rental property(ies) instead of re-renting them.²

"We see that homes are increasingly moving from the private rental sector to the buying market," said Jasper de Groot, CEO of Pararius. "This trend limits the choices for those outside the buying market and hinders personal development, but it also has a broader economic impact. The buying market is a whopping 8 times larger than the private rental market; a shift from rental to buying has a much greater negative effect on the rental market than the marginal positive effect on the - much larger - buying market. Despite government measures, rental prices in the private sector continue to rise."

Average number of responses to a rental property

In the first quarter of 2024, a rental property in the unregulated housing sector that became available for new tenants received an average of 19 responses, which is a slight decrease compared to the first quarter of 2023, when this average was 22 responses.

In Amsterdam, a vacant rental property could expect an average of 18 responses in the first quarter of 2024, compared to 34 responses a year ago. In Eindhoven, the average number of responses to a rental property in the first quarter of 2024 was 18, almost half the number compared to a year ago; then, a vacant rental property could expect an average of 35 responses. In Utrecht, a rental property in the unregulated housing sector received an average of 38 responses, a decrease compared to the 46 responses in the first quarter of 2023. Also in The Hague, there were fewer responses to a property than a year ago: a new rental property in the unregulated housing sector could expect 30 responses, while last year it was 37.

In Rotterdam, a rental property in the unregulated housing sector listed on Pararius received an average of 33 responses, compared to 31 in the first quarter of 2023.

Rent price development in largest cities

The average square metre price of a rental property in the unregulated housing sector increased in all five largest cities in the first quarter of 2024. In Eindhoven, the square metre price increased by 2.4 percent to €17.71. With this square metre price, Eindhoven remains the only G5 city below the national average of €18.30 and is also the G5 city where rental prices have risen the least in the first quarter of 2024.

Amsterdam saw an increase in the average square metre price of 5.1 percent; new tenants paid €27.00 per square metre per month. In The Hague (+6.6%), Rotterdam (+9%), and Utrecht (+4.2%), the square metre price of a rental property in the unregulated housing sector rose to €19.39, €19.53, and €20.67 respectively.

Price development in medium-sized cities

Pararius also reports information on rent price developments at the local level. This information pertains to places where more than 30 rental properties in the unregulated housing sector were offered during a quarter. The data indicates that the average square metre price of rental properties in the unregulated housing sector increased in almost 78 percent of the 85 locations in the first quarter of 2024.

Significant percentage increases occurred in places such as Delft (+10.3%), Deventer (+18%), Groningen (+12.1%), Haarlem (+9.6%), and Hilversum (+12.9%). In Almere (€16.74), Dordrecht (€14.65), and Helmond (€13.56), the average square metre price for new tenants decreased in the first quarter of 2024. Tenants paid respectively 0.5, 6.5, and 1.8 percent less than last year.

Delivery forms in the Netherlands

Pararius distinguishes three delivery forms: unfurnished, semi-furnished, and furnished. Unfurnished rental properties increased by 15.2 percent in square metre price in the first quarter of 2024: new tenants paid an average of €16.87 per month. For a furnished property, a new tenant paid 11.7 percent more than a year ago (€22.41), and for a semi-furnished property, 6.9 percent more (€17.09)

Housing types in the Netherlands

In the first quarter of 2024, the average square metre price of apartments and single-family homes increased by 6.3 and 6.7 percent respectively compared to a year ago. New tenants in the Netherlands paid €19.23 per square metre per month for an apartment and €14.42 per square metre per month for a single-family home.

Size segments in the Netherlands

In the first quarter of 2024, rental properties in the smallest size segment (less than 75 square metres) cost an average of €22.69 per square metre per month. That is 9 percent more than a year ago. The square metre price of larger rental properties is below the national average square metre price. For example, new tenants paid €17.77 for a rental property between 75 and 100 square metres (+8.3%) and €15.46 for a rental property between 100 and 125 square metres (+8.7%). The average rent for a rental property between 125 and 150 square metres increased by 6.8 percent: new tenants paid €14.62 per square metre per month.

Dutch Provinces

At the provincial level, not all areas saw percentage price increases in the first quarter of 2024. In the province of Drenthe, the average square metre price decreased by 1.7 percent; new tenants paid €12.65 per square metre per month.

In the other provinces in the northern Netherlands, the square metre price of a vacant rental property did increase. However, all of these square metre prices are (considerably) below the national average. For example, new tenants paid €12.44 per square metre per month for a rental property in Friesland, which is 3.2 percent more than a year ago. The largest percentage price increase was observed in the province of Groningen (€17.22): new tenants paid 10.8 percent more than in the first quarter of 2023.

Percentage price increases compared to a year ago were also observed in the provinces in the southern Netherlands in the first quarter of 2024. In Noord-Brabant (€16.03), the square metre price increased by 3.6 percent, while in Limburg (€13.85), it rose by 4.8 percent. In Zeeland, the square metre price remained the same as last year: new tenants paid €13.56 per square metre per month.

In the so-called Randstad provinces³, the average square metre price is significantly higher. The average square metre price in Noord-Holland (€23.45) and Zuid-Holland (€18.52) is above the national average. Rental prices in these provinces increased by 9.6 and 6.6 percent respectively compared to a year ago. In the province of Utrecht, new tenants paid 4.3 percent more than a year ago; rental properties cost an average of €18.27 per square metre per month.

Explanation of calculations

The figures in this rental report are based on 23,384  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, semi-furnished 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, the area of all rental properties is between 40 and 300 square metres. None of the properties are given as price on demand. There is one property where the rental price 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, the other 9 properties are.

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.

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.