The average square meter price of rental properties in the freehold sector fell in the second quarter of 2021. Compared to the same period last year, rental prices fell by 2%. The average square meter price per month came to €16.37 this quarter. According to Pararius' latest figures, it appears that this is the fourth quarter in a row in which a percentage decline has been measured.

In the four major cities in the Netherlands (Amsterdam, The Hague, Eindhoven and Rotterdam), average rents decreased in the second quarter of 2021. In the city of Utrecht, rents remained the same compared to last year. In Amsterdam, prices have been falling for four quarters in a row now. This decrease is 6.8% compared to a year ago. Not only in the big cities was there a price decrease. Also in many medium-sized cities prices have fallen, Pararius concludes.

Expats

The drop in prices has several causes, including the absence of expats due to COVID-19. The absence of expats is especially noticeable in the larger cities in the Netherlands, where rental properties in the higher segment remained vacant longer. By reducing the rent slightly, you reach a wider target group and the vacancy costs can be limited. This development has had a great impact on rental prices in the big cities. Right now, the expat market is picking up. As more and more people have been vaccinated, companies want more employee involvement again. Similarly, more and more people are working in the office. The Netherlands is attracting expats again but whether it will return to the old level as before remains to be seen.

Tightness in the housing market

There is still a significant housing shortage in the Netherlands. By 2021, the shortage has decreased slightly due to higher construction output and lower demographic growth. Currently, the focus is mainly on building social rental housing. In the Netherlands, the share of social rental housing is already considerably high at 33%. The share of free sector rental housing lags behind at 7%. While there is a high demand for middle segment rentals. Thus, more should be invested in increasing the free sector rental housing. This is confirmed by sources such as De Nederlandsche Bank, the Central Planning Bureau and OECD.