Price drops in the private rental sector
2020 was an unprecedented year, filled with social and economical changes, and this is also reflected in the Dutch housing market. The only difference though, is this change might be for the better!
At the end of 2019 we saw there was an increase in the price of private sector rental housing, but this then levelled off in the first half of 2020. Following this, in the third quarter of 2020 we saw a price drop for the first time in six years, and tenants were now paying 0.4% less than the previous year - and the good news is, the price drop is still ongoing!
In the third quarter of 2020, the average price per square meter fell by 5.8%, and this continued to drop to 6.8% in the fourth quarter of 2020! Drops in prices this large have not yet been seen in Amsterdam, and we are also seeing the lowest prices per square meter since 2017!
Another major change that can be seen in the rental market is the difference in prices in rental properties in different districts throughout Amsterdam. Up until recently, there were significant price differences between the districts in Amsterdam, but now we are seeing there is only an average of €00.01 difference per square meter between properties in the Amsterdam Center and in Amsterdam South.
We can predict that this general trend of rental rates dropping will soon spread throughout the Netherlands. In the past it has been the case that the five major cities in the Netherlands (Amsterdam, The Hague, Eindhoven, Rotterdam and Utrecht) have been the trend setters for rental prices, as after the housing crisis, they were the first to rise in Amsterdam. Rotterdam and the Hague swiftly followed, and then the rest of the Netherlands followed suit. It appears this is happening again, but in reverse! In Amsterdam, rental prices stagnated from the second quarter of 2019, whereas in the rest of the country this became apparent in the first quarter of 2020. The price drops were also first noted in Amsterdam, and we can assume that this drop will soon be seen on a national level.
Despite the continued decrease in rental prices we can see throughout the Netherlands, it’s important to note that the pressure of the private rental sector is still present. Rental properties are still highly sought after, and keeping in mind that only 7% of all properties in the Netherlands are available as private sector rental homes, the market is still just as dynamic as ever!
If you have any questions relating to the rental market in the Netherlands, please feel free to reach out to our rental team, we’d love to hear from you!
You can find further information on this topic by reading the following article which was provided by Pararius: https://www.pararius.nl/nieuws/opnieuw-dalende-huurprijzen-in-vrije-sector
