Escalating rent prices in free sector housing market

Tenants renting in the Netherland’s free sector housing market are experiencing escalating rent prices, especially in four major Dutch cities.

According to figures released by Pararius, one of the leading rental platforms in the Netherlands, a 2,3 per cent rate increase affected rent prices in the second quarter of 2015, compared with the same time last year.

Free sector housing

The Dutch housing market is divided into two sectors: rent-controlled, where rental limits are set by the Huurcommissie (the Rental Committee), and the free sector, where landlords can set their own prices.

What sector a property falls into relies on a point system (woningwaarderingsstelsel) where a number of factors such as size, location and facilities are calculated to distinguish the sector of housing. Any house awarded more than 141 points falls into the free housing sector.

Rocketing prices in major cities

Four major cities experienced the highest increases in the non-controlled sector: Rotterdam saw an increase of around 9 per cent, followed by Utrecht, Amsterdam and The Hague showing a rise in the vicinity of 7 per cent. Other major cities Eindhoven and Tilburg endured the least increase, with 1,8 per cent and 3,6 per cent respectively.

Amsterdam at its highest rental rate

Pararius rental figures showed that an Amsterdam tenant now pays an average of 20,68 euros per square metre per month, averaging a rent of 2.120 euros per month.

Utrecht followed with an average of 15,06 euros per square metre; tenants in The Hague pay an average of 13,74; Rotterdam shows figures of 13,30 euros per square metre per month.

Compared with the national average of 12,71 euros per square metre per month (1.337 euros per month), the highest rents are visible in the Randstad, with the province of Noord Holland topping the list with 17,50 euros - an increase from last year’s 16,96.

The Province of Friesland is the cheapest for private sector housing with a rate of 8,16 euros per square metre per month.

Amsterdam averages the shortest time period to rent housing, at 72 days - 16 days shorter than the national average.

Increasing demand

Jasper de Groot, CEO of Pararius, explains how there are more people trying to rent houses in the free sector housing market than houses becoming available: "In the past two years there were continuously more homes rented than were put up for rent. This disruption in supply and demand causes a driving effect on the rent price which is particularly evident in the larger cities."