Headline: Netherlands Sees Largest Rent Hike in Three Decades, Social Housing Hit Hardest
Subheading: July’s rent increases surpass 1993 levels, with social housing experiencing the most significant rise.
Amsterdam, 4 September 2024 — The Netherlands has witnessed the most substantial rent increase in 30 years, with July’s figures showing an average rise of 5.4 percent compared to the same period last year, according to data released by Statistics Netherlands (CBS). This marks the highest increase since 1993, when rents rose by an identical percentage.
The increase was particularly pronounced in the social housing sector, where housing corporations and other social housing landlords requested rent hikes of 5.6 percent and 5.7 percent, respectively. This is nearly as much as the maximum 5.8 percent increase allowed by the government as of July 1.
The government has historically capped rent increases to safeguard the purchasing power of low-income households during various crises. Before this, rent increases were often on the low side due to high inflation, energy prices, and the impact of the coronavirus period, which helped maintain higher purchasing power for low-income earners, explained CBS chief economist Peter Hein van Mulligen. He suggests that this year’s figures may reflect a catching up of rents after previous years’ constraints.
In the private sector, rent increases were slightly lower at 5 percent, with a cap of 5.5 percent in place since January. Despite this, tenants in the private sector have faced significant rent hikes in recent years.
The new Affordable Rent Act, which came into effect in July, has introduced regulations for rents in the middle segment of the housing market.
The city of Rotterdam saw the most substantial increase, with residents paying 5.9 percent more in rent. Amsterdam experienced the smallest increase among the four large municipalities at 5.2 percent. By province, Drenthe faced the highest increase at 5.8 percent, while Groningen saw the smallest at 5 percent.
The issue of rent increases has been a contentious topic, with many tenants taking their landlords to court over what they perceive as excessive rent hikes. In some cases, judges have ruled in favor of the tenants, leading to concerns from the association of real estate investors IVBN that landlords may have to refund billions of euros in rent.
In a recent advisory report to the Supreme Court regarding two lawsuits about rent arrears, it was suggested that landlords in the private sector should be allowed to increase rent by a maximum of 3 percent above inflation.
As the Netherlands grapples with these significant changes in the housing market, the impact on tenants’ budgets and the broader economic landscape remains a critical concern for policymakers and citizens alike.
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