Fewer rental transactions at higher prices

The number of rental transactions in the basic rental segment has fallen sharply in 2023. The total number of rented homes in 2023 was 13% lower than in 2022. The decline increased in magnitude during the year 2023. In the 4th quarter of 2023, more than 30% fewer homes were rented compared to the 4th quarter of 2022. The decline occurred in both houses and apartments. In existing buildings, 25% fewer homes were rented in the fourth quarter, in new construction the decline of more than 50% was much greater compared to the fourth quarter of 2022. The decline in the number of rented homes continued in the semi-furnished and furnished segment. Here too, far fewer homes were rented. This decline has been going on for 2.5 years. In the unfurnished part of the market, 11% fewer homes were rented throughout 2023. In the 4^e In the quarter of 2023, that percentage will increase to almost 20% fewer rentals compared to 4^e quarter of 2022. In the furnished segment, the decline over the entire year is 19% and in the last quarter of 2023 even more than 25%.

Price development

The decline in rental numbers is certainly not the result of a declining demand for rental properties. This demand remains as high as ever. This is also reflected in the average prices of rented homes, which have risen sharply in 2023, possibly as a result of higher investment costs, regulations and regulations, economic uncertainties and the current investment climate.

The average rental price per square meter of rented residential homes will be 10% higher at the end of 2023 than a year earlier. The square meter price is €12.31
For rented apartments, the price development amounts to +4%, to a square meter price of €16.64
The rising prices are also reflected in the share of rented homes by price range. At the end of 2022, 1 in 4 homes was rented in the price range up to 1,000 euros per month, a year later this is still only 1 in 5
Regional differences are as always large. The largest price increases occurred in the municipalities of Arnhem and Haarlem with more than 12% on an annual basis. Average rental prices also rose sharply in Den Bosch and Utrecht by almost 8%. Of the large municipalities in the Netherlands, only Almere and Amstelveen show a price decrease, although this is limited to less than 1%.

Political intervention increases pressure on the rental housing market

The figures show that the number of rental transactions in 2023 has decreased significantly across the board. This is a worrying development as the demand for rental properties remains high. The need for additional rental properties and mobility is great. This requires investments from institutional and private investors as well as housing associations. In response, however, politicians are focusing on rent price reductions and more protection for existing tenants. This puts pressure on returns on investments in rental properties from institutional and private investors. As a result, investors may start selling homes, which ultimately leads to less supply of rental properties. This only makes the problem worse. The NVM and VGM NL advocate a balanced and long-term policy that prevents excessive rents, encourages sustainability and at the same time takes into account a positive return for investors. This means that it remains attractive for private and institutional investors to invest in rental properties to continue to provide the much-needed supply.

Rental prices per m2

The average rental prices per square meter vary considerably per municipality.

These are highest in Amsterdam at €22.78 per square meter
Prices in Amstelveen and Haarlem are just below this at €20 per square meter
The square meter prices are the lowest in Almere. The average price of a rented home here is € 11.78.

Upholstered and furnished segment

In the unfurnished and furnished segment, average rental prices increase by 7 to 8% in a year.

The average rental price in the unfurnished segment is € 19.69 per square meter
The furnished segment is almost 5 euros higher per square meter at € 24.62
The differences between cities are significant. Rotterdam and Amsterdam in particular stand out here. Amsterdam has seen a price increase of 7% to approximately 30 euros per square meter
In Rotterdam the price rises by more than 10% to approximately 20 euros per square meter
Delft seems to be taking a pause with the price development. Rental prices in both the unfurnished and furnished segments are declining and are now lower on average than in Rotterdam.

Living area will increase in 2023

The average living area of rented homes has been declining for years. 2023 is an exception given the increase in the average size of homes.

For residential houses in existing buildings, the average surface area is 116 square meters
A rented apartment in an existing building has an average surface area of 83 square meters at the end of 2023
In new construction, the rented homes are a lot smaller. Newly built houses have an average surface area of 110 square meters
A rented new-build apartment has an average surface area of 73 square meters.

Representative national coverage

The rental market figures of VGM NL and NVM arise from approximately 50,000 rental transactions in the private sector on an annual basis. This is a market share of approximately 50%. The composition of the transactions provides a representative picture of the breakdown in the total Dutch private sector rental market. More than 78% of the transactions are basic rentals, approximately 15% are furnished and 7% are furnished and therefore provide a more reliable picture for the whole of the Netherlands with national coverage. The figures usually include 15% to 20% of new-build rental properties, which is also a good reflection of the current market situation.

Click here for the associated market report regarding changes in the private sector rental housing market in 2023.