In recent research, Jan Rouwendal and Maureen Lankhuizen examine developments in rents and returns in the private rented sector. The private rented sector had little room to manoeuvre in the Dutch housing market after the Second World War. It was hemmed in between a sizeable social rental sector and a tax-advantaged owner-occupied sector. In recent years, however, private renting has made a remarkable comeback. The authors look at rents and returns realized in this market in the Amsterdam Metropolitan Area during the years 2012-2019. They find a similar relation between rents and housing characteristics as between prices of owner-occupied housing and housing characteristics. The high rental level in Amsterdam is spreading to the surrounding area, while rent increases in Amsterdam itself levelled off somewhat. The gross initial yield in the private rented sector is between 6 and 7%, and is clearly under pressure in Amsterdam. A restraint on the supply of private rented accommodation helps to sustain the high yield.
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February, 2021