Investors are very interested in investing in the residential sector. Currently, there is both a quantative and qualitative shortage of homes in the Dutch private rental market -  especially in the major cities. 

Key findings

1. Despite strongly-rising purchase prices (14.7%), also in regions with a limited qualitative housing shortage, the greatest need for more rental homes can be found in the major cities.

2. Partly as a result, rental homes in the Netherlands are still less affordable than owner-occupied homes. The shortage is especially visible in the mid-range segment.

3. In the five cities studied, the majority of private sector rental homes is not or almost not affordable to an average household in the same city.

4. In view of the building permits issued, market parties aimed at rental homes are very active. However there are some exceptions. In Amsterdam, for example, fewer permits were issued to market parties with a focus on rental homes (at 5,212) compared to smaller cities such as Utrecht (9,390) and The Hague (5,742).

5. In 2021, considerable regulations were introduced on the housing market. This policy is mainly focused on improving affordability, but the downside is that the financial feasibility of new-build projects is reduced.

6. This is mainly caused by the increase in the transfer tax, making institutional investors shift their focus from existing buildings to predominantly new-build developments.

7. In order to comply with the raised bar for new-build developments from 75,000 to 100,000, local and national governments and market parties must work together as intensively as possible. Institutional investors in particular have a large amount of capital available for investing, but cooperation is not truly getting off the ground as much as it should.

Read the full report here.