How is the rental market doing in Q1 of 2024?
How is the rental market doing in the first quarter of 2024? Many free sector homes are being sold, the rental supply is shrinking, and the rental price per square meter is rising. In this blog, we delve deeper into the key findings of the Pararius rental monitor and what insights it provides about the current state of the free sector rental market.
Pararius rental monitor figures
Housing platform Pararius shares a quarterly data analysis of the supply and rental prices in the free sector. They provide figures on the number of free sector homes, which ones became available during a certain period, and which homes were actually rented out again or moved to the sales market. The shared figures only relate to free sector rental homes.
Shrinking supply of rental homes; higher rental prices
In Q1 of 2024, there were 27.9 percent fewer homes offered compared to Q1 in 2023 and even 38% fewer compared to Q1 in 2022. One of the reasons for the shrinking supply is the sales wave that started at the end of last year. Many private investors are choosing to sell the homes that become available instead of renting them out, partly due to the changed tax rules and the plans of Minister de Jonge. The result: fewer rental homes in an already scarce market, with the consequence of increasingly higher rental prices. In Q1 of 2024, the average price per square meter of a rental home rose to €18.30, compared to €16.85 in Q1 2023. In Haarlem, rental prices even increased by an average of 9.6%.
Shift to the sales market
Since Q4 2022, homes have been shifting from the rental market to the sales market. In Q1 2024, 7% of the homes on the sales market came from the rental supply. This is a significant increase compared to Q1 2022, when less than 4% of the homes on the sales market came from the rental supply. More homes are coming onto the sales market, but this limits the options for people who fall outside this market. Additionally, the sales market is eight times larger than the rental market, and the impact on the decrease in rental homes is greater than the increase in sales homes. Despite the government's attempts to control rental prices, we are currently seeing them rise due to the shrinking supply.
Conclusions
The government's measures are affecting the number of homes in the rental market. The number of rental homes shifting to the sales market has never been higher, and previous reports indicate that the construction of new homes is significantly lagging. Free sector rental homes are becoming increasingly scarce, and thus the price is rising. Depending on the decisions the House of Representatives will make regarding the Affordable Rent Act, the supply may decline further or, in the best-case scenario, remain relatively stable.