Published on and written by Cyril Jarnias
The real estate market in the Netherlands is going through a paradoxical phase. Prices continue to climb, transactions are picking up again, and interest rates are stabilizing, but the housing shortage remains acute, construction is stalling, and regulatory pressure is upending both investors and tenants. In other words, the market is normalizing without really easing up. Here is a detailed overview of the major trends reshaping the Dutch residential real estate market today.
Price Increases Slowing but Not Reversing
After the post-COVID price surge, the dynamic has calmed, but not enough to offer buyers a real breather. Data from Statistics Netherlands (CBS) shows that in autumn 2025, the price index for existing homes was still rising by nearly 7% year-on-year, or about 3.6% in real terms after adjusting for inflation. The average price of an existing house or apartment reached nearly 487,000 euros, up more than 5% year-on-year.
Over the past decade, residential real estate prices have surged approximately 85% in nominal terms.
The year 2023 marked a brief pause, with the index for existing homes declining by about 3%, quickly erased in 2024 when prices rose again by around 8.7%. In 2025, the increase is running at about 8.6%, according to several major banks, which remains extremely robust given the rise in interest rates between 2022 and 2023.
Forecasts for the coming years point to normalization rather than a reversal. Rabobank anticipates further growth of about 5.5% in 2026, ABN AMRO forecasts 3%, ING and the Dutch central bank (DNB) expect close to 4%, while Fitch Ratings mentions a range of 4 to 6%. In other words, the dominant scenario is a more moderate but persistent rise, supported by a structural supply deficit.
An Increasingly “Buyer-Friendly” Market That Remains Pricey
For households, 2026 is often described as a more favorable year than 2025, without turning into a true “buyer’s market.” Several factors are at play: price growth is expected to be around 4 to 5%, instead of about 8% the previous year; interest rates are stabilizing or declining slightly; and the wave of sales of rental properties is reducing pressure somewhat in certain segments.
Households’ home purchasing power in France remains high compared to Europe. For a couple buying a three-bedroom house, the price-to-income ratio is about 6, one of the lowest in the EU. However, for a single buyer, this ratio reaches about 8.5, highlighting the growing difficulty for singles to access homeownership.
Regional Gaps Are Reshaping
One of the major silent transformations of the Dutch market is the gradual rebalancing between regions. For years, the Randstad – the vast urban arc including Amsterdam, Rotterdam, The Hague, and Utrecht – drove price increases. Now, formerly cheaper areas are experiencing the most spectacular gains.
In 2025, several rural or semi-urban provinces such as Groningen, Drenthe, or Overijssel recorded price jumps between 20 and 23% over the 2023-2025 period. Annual increases exceeding 12% have become common. This dynamic stems from a dual movement: households priced out of large cities and the scarcity of supply, along with a long-term catch-up in markets that remained more affordable.
Randstad: Utrecht Booms, Amsterdam Cools
The Randstad is not a homogeneous block. Utrecht, for instance, stands out as a champion. The province saw prices rise by about 14 to 15% year-on-year in 2025, while the city of Utrecht itself exceeded 14% annual growth over certain periods. Projections suggest this region could still see over 7% growth in 2026, one of the highest in the country.
Average price of an existing home in Amsterdam in Q3 2025, the highest in the country despite a downward trend.
The Hague and Utrecht show different profiles: the former sits just below the national average, at about 484,000 euros with annual growth of around 4%, while the latter peaks at around 566,000 euros, driven by growth close to 8%. Beyond these major cities, several medium-sized agglomerations such as Eindhoven, Maastricht, or Groningen are seeing prices exceed or approach the 500,000 euro threshold.
Toward a Narrowing of Price Gaps
Overall, economists’ findings are clear: formerly cheap regions are gradually catching up with traditional Randstad markets. The consequence is twofold. On the one hand, households find it increasingly difficult to find truly affordable pockets; on the other hand, the risk of extreme dualization between large metropolises and the rest of the country is slightly reduced, at the cost of generalized tension.
Price growth is expected to shift toward the north and provinces like Flevoland, while Amsterdam will see its prices rise “less quickly” than the national average in the coming years.
Rabobank
Transaction Volumes Surge Despite Tightness
Another striking sign of the market’s vigor is the spectacular rebound in sales volumes. Between Q1 and Q3 2025, more than 171,000 owner-occupied homes changed hands, a 17% increase compared to the same period in 2024. For the full year 2025, sales are estimated to exceed 230,000, which would be one of the highest levels in the past decade.
The number of real estate transactions forecast by Rabobank for 2025 in the Netherlands.
A significant part of this renewed activity stems from a structural phenomenon: the massive sale of homes from the private rental stock. Small investors, facing a combination of rent caps, higher wealth taxes, and stricter regulations, are offloading part of their portfolios, sometimes on a large scale. These properties – often small apartments in average condition located in cities – are entering the owner-occupied market.
This “destocking” has two immediate effects: it increases the supply of homes for purchase, helping to slow price growth, but it reduces rental supply, especially in the mid-range segment, as will be discussed later.
A Structural Housing Shortage
Behind the price and transaction dynamics lies a simple reality: the Netherlands lacks housing. Estimates from ABF Research and the government converge: the shortage is around 396,000 to 400,000 homes as of mid-2025, or nearly 5% of the total stock of about 8.2 million homes. Some scenarios predict the deficit could worsen to 450,000 homes by 2027 if construction does not pick up significantly.
Target: 900,000 Additional Homes… But Pace Insufficient
The government has set the ambitious goal of building more than 900,000 homes by 2030, with an annual target of 100,000 units, two-thirds of which would be “affordable” for low- and middle-income households. So far, this target is far from being met. The best year of the past decade saw only about 75,000 homes completed. In 2024, net additions to the stock were around 82,000 units, and the first half of 2025 already shows signs of slowing.
Number of homes completed in France in the first half of 2025, down 3.5% year-on-year.
The average construction time is also lengthening. It now takes about two years to build a home, compared to a year and a half ten years ago, and large projects often take 8 to 12 years from planning to delivery. In this context, the 24 “breakthrough locations” identified by the state – priority areas where an additional 150,000 homes are hoped to be unlocked, from Alkmaar to Hengelo/Enschede, including Apeldoorn and Helmond – represent more of a long-term strategy than an immediate response to the crisis.
Multiple Hurdles: Labor, Permits, Nitrogen, and the Power Grid
The reasons for this gridlock are well identified. Developers cite a chronic shortage of skilled labor, leading to higher costs and longer timelines. Permitting procedures remain cumbersome and lengthy, even though the new government promises to simplify appeals and reduce bureaucracy.
The Council of State’s case law has tightened conditions for issuing building permits near natural areas, leading to the suspension of many projects. Up to 244,000 homes and 138 billion euros in investments are at risk in the short term due to these restrictions.
The second is growing congestion on the electricity grid. In several regions, grid operators can no longer guarantee the rapid connection of new neighborhoods, delaying or raising the cost of projects. The requirement to build without gas (in effect for new buildings for several years) and the widespread adoption of heat pumps are increasing pressure on an already strained grid.
Supply Mismatch with Demographic Trends
Beyond sheer volume, it is the very structure of supply that is problematic. The number of households is growing faster than the population, largely due to the increase in single-person households, which already account for about 40% of all households. Yet the distribution of new homes by size has changed little: smaller homes are getting smaller, larger ones larger, but the overall share of small units is not increasing enough.
In several rural areas, less than half of single-person households could find a home under 75 m². Meanwhile, the aging population is creating growing demand for compact, senior-friendly homes, but the supply of specialized or adapted residences is not keeping pace.
A Rental Market Under High Tension
The structure of the Dutch rental market is atypical in Europe. About 70% of households are homeowners, a rate higher than in Germany, France, or the United Kingdom. Among renters, the vast majority (about one-third of Dutch households) live in social housing, managed by housing associations (woningcorporaties). The private “market” rental segment houses less than 5% of households.
This configuration has long helped stabilize rents at the lower end, but it has also contributed to drying up supply in the mid-range segment. Long waiting lists for social housing (often over ten years in major cities) push many households into the private market, where competition is fierce.
The Affordable Rent Act, or the Great Mid-Range Shift
The entry into force in summer 2024 of the Affordable Rent Act (Wet betaalbare huur) marks a decisive turning point. It extends the rent control system based on a points system (woningwaarderingsstelsel) to a broader segment of the market. Specifically, all homes with up to 186 points – i.e., maximum rents of around 1,120 to 1,160 euros per month – now fall under a regulated regime.
The revised points system gives more points to well-insulated homes with good energy labels and outdoor spaces, explicitly incorporating energy performance into regulation. To make projects more attractive to investors, new homes eligible for this system can exceptionally charge rent up to 10% above the legal cap for a period of twenty years.
In the immediate term, the government estimates that more than 300,000 homes will see their rent decrease by about 190 euros on average thanks to this measure. But the side effect is severe: some private landlords see this as too strict a cap on their potential income and uncertain tax visibility, prompting them to sell.
Statistics from the Pararius platform illustrate this phenomenon. Before 2022, barely 2 to 3% of homes sold came from the private rental stock. By 2025, this share had nearly tripled. In Q2 2025 alone, more than 2,100 homes formerly rented out were transferred to the ownership market via Pararius, up more than 40% year-on-year.
Supply Plunging, Rents Rising Sharply
While thousands of homes leave the rental stock, demand remains constant or even increases due to population growth and the arrival of expatriates. Result: the private rental market is becoming extremely tight.
Decline in the number of rental homes available in the unregulated segment in Q2 2025 compared to the previous year.
Rents are adjusting accordingly. Nationally, the average rent in the unregulated sector is close to 1,830 euros per month in Q2 2025, requiring a gross income of more than 5,400 euros per month. The average rent per square meter has exceeded 20 euros for the first time, with an annual increase of nearly 8%. Apartments rent on average around 21 to 22 euros/m², single-family homes around 16 to 17 euros/m², with stronger dynamics for the latter.
The table below shows average rent levels per square meter in major cities in Q2 2025.
| City | Average Rent €/m² (Q2 2025) | Approx. Annual Change |
|---|---|---|
| Amsterdam | 27.91 | +2.2% |
| Utrecht | 21.60 | +1.2% |
| Rotterdam | 21.52 | +7.2% |
| The Hague | 21.34 | +6.8% |
| Eindhoven | 18.38 | +4.3% |
In some medium-sized cities, increases are even more pronounced: Roermond, Hoorn, Leeuwarden, and Arnhem have seen rent per square meter jump by 14 to nearly 30% year-on-year. Only a few cities like Zwolle, Hoofddorp, or Heemstede have seen rents decline slightly, often after several years of strong growth.
Stronger Regulation but Increased Assistance
Alongside the expansion of rent controls, the government is also capping increases on current leases. For 2026, the maximum allowed increases are set at 4.1% for social housing, 6.1% for the regulated mid-range segment, and 4.4% for high-end private rentals, based on a mix of inflation and wages.
Housing associations generally use their margins to the fullest, contributing to rent increases in the social sector, although they remain well below market prices. Starting in 2026, the reform of the housing allowance (huurtoeslag) will significantly expand the number of beneficiaries: nearly 170,000 additional households will be eligible. This extension results from the removal of the eligible rent cap, the lowering of the age for the full rate from 23 to 21, and an increase in savings limits.
Nevertheless, the housing burden remains heavy for low-income renters: in 2022, households in the lowest income quintile spent on average more than 35% of their disposable income on rent, compared to 13-14% for the wealthiest. This is one of the main blind spots of a model long presented as protective.
Taxation and Regulation: A Major Shake-Up for Investors
The pressure on the private rental stock is not solely due to rent controls. It is the combination of at least three major policy levers – wealth taxation, transaction taxes, and tighter regulations – that is driving many investors out of the market.
In the Netherlands, rental income is taxed via the ‘box 3’ system, which taxes a theoretical return on assets rather than actual income. Between 2018 and 2024, the effective tax rate increased from 30% to 36%, and the deemed return for real estate rose from about 5.3% to over 6%. This calculation method can be particularly unfavorable for a highly leveraged investor, as it does not account for actual profitability after deducting interest and expenses.
Add to this a differentiated transfer tax. For a primary residence, the rate remains at 2%, and first-time buyers under 35 are even exempt up to a purchase price of 555,000 euros in 2026. However, for an investment property or second home, the rate rises to 10.4% until 2025, then falls to 8% from 2026. Even though this announced reduction from 10.4% to 8% is a small signal in favor of investors, the level remains high.
Local authorities have introduced several measures to limit speculation: banning the conversion of certain homes into private rentals (buy-to-let), requiring owner-occupation for new builds or cheaper homes, and in Amsterdam, a specific permit for second homes from 2026 with strict criteria (regular professional activity on site, informal care for a relative, length of residence).
In this context, the gross rental yield has certainly risen to around 6.4% nationally in mid-2025, with peaks over 7% in The Hague, but the net appeal for small landlords has clearly eroded. Most analysts expect the large wave of investor sales to stabilize by 2026, once portfolios are adjusted to the new rules.
A Massive but Relatively Healthy Mortgage Market
While taxation weighs more heavily on investors, owner-occupiers still benefit from a significant set of advantages. The most emblematic remains the deductibility of mortgage interest (hypotheekrenteaftrek), a generous scheme by OECD standards, with a rate still around 37% for middle incomes. The current government has promised not to touch it in the short term, despite recurring discussions about phasing it out.
The Dutch mortgage market is sizable: more than 850 billion euros outstanding at the end of 2024, of which about 620 billion is held by banks and over 260 billion by non-bank institutions (insurers, funds, etc.). It still represented over 90% of GDP in 2020, a ratio reduced to about 75% in 2024, thanks to economic growth and early repayments.
Interest Rates Plateauing, Credit Appetite Rising
After the 2023 peak, mortgage interest rates have eased. The European Central Bank (ECB) has maintained a deposit rate around 2% since mid-2025, serving as a reference for lenders. In September 2025, the average rate on new mortgage loans in the Netherlands stood at around 3.5%, 35 basis points lower than a year earlier. Rates on outstanding loans average around 2.7%.
Ceiling of the National Mortgage Guarantee (NHG) applicable for a mortgage loan in the Netherlands.
The dynamism of credit is in line with this: over the first nine months of 2025, more than 117 billion euros in new loans were granted, nearly 64% more than over the same period in 2024. Loan applications recorded by the HDN network increased by 16% in Q3 2025, with an average loan amount of around 374,000 euros.
Stricter Lending Standards and the Role of Income
The regulator and the Nibud organization, responsible for defining “responsible” lending standards, have however tightened the screws for 2026. Even though wages are expected to increase by about 4.1% that year, some households will see their borrowing capacity decline if their income stagnates, due to more conservative debt ratios.
Young buyers and low-income households are most affected by adjustments to the usury rate. However, since 2025, a more favorable rule applies to holders of student debt: only the remaining amount owed is taken into account for calculating borrowing capacity, rather than the original debt. This allows a slight increase in the amount they can borrow in many cases.
Energy and Climate: New Value Determinants
Another major undercurrent running through Dutch real estate is the integration of energy efficiency into nearly all market dimensions, from market value to borrowing capacity, public subsidies, rents, and even the ability to lease a property.
The Energy Label: Now as Important as Location
Since 2024, a home’s energy label – from A++++ (excellent) to G (very poor) – directly influences the maximum mortgage amount. Buyers of a highly efficient home can borrow up to 25,000 to 40,000 euros more than buyers of a standard property, depending on the exact performance level, while those buying a poorly rated home (E, F, or G) can obtain up to 20,000 euros additional specifically earmarked for energy renovation work.
An improvement in the energy performance certificate (EPC) from D to A can increase a home’s value by 35,000 euros, an increase of about 7%.
The average buyer has understood this well. By autumn 2025, the majority of homebuyers say they consider the energy label as important as price or location – especially those under 35 and urban buyers in Amsterdam, Utrecht, or Rotterdam. The past surge in energy costs served as a wake-up call: a poor label is now, for many, a “deal breaker.”
Regulations Tightening for Landlords
For landlords, the horizon is narrowing. First, the regulated rent points system heavily awards points to efficient homes, limiting potential rents for poorly insulated properties. Second, a clear deadline has been set: starting in 2030, it will be illegal to rent out a home with a label of E, F, or G. Currently, an estimated 580,000 rental homes are still in this situation.
The maximum public subsidy rate for installing a heat pump, through the ISDE scheme.
A Solid but Constrained Economy
On the macroeconomic front, the environment remains rather favorable for the housing market. Real GDP grew by about 1.1% in 2024, and the International Monetary Fund expects growth of about 1.4% in 2025 and 1.2% in 2026, slightly above the European average. Inflation, after peaking at over 11% in 2022, has fallen back to around 3% in 2024-2025 and is expected to converge toward the 2% target by 2026.
Unemployment rate in France at the start of 2025, slightly up from the lows of 2022.
Fitch Ratings confirms the solidity of the Dutch credit rating with an “AAA” rating and a stable outlook. The major constraints on the economy identified by agencies – housing, nitrogen, electricity grid – are precisely concentrated in the real estate and construction sectors.
What This All Means for Market Players
In light of these trends, the Dutch real estate landscape looks like this: a structurally strong demand, fueled by household growth, rising wages, and a robust economy; a supply constrained by regulatory, environmental, and technical factors; a private rental market suffocated by the withdrawal of small investors; and increasingly detailed regulation encompassing prices, taxation, energy efficiency, and usage.
For first-time homebuyer households, 2026 could offer slightly more favorable conditions: less competition from investors, a possible transfer tax exemption up to 555,000 euros, higher NHG loan guarantee limits at 470,000 euros, and generally stable interest rates. Experts even anticipate a slight shift in bargaining power toward buyers in certain market segments, without reversing the structural upward trend in prices.
For investors, however, the period remains tricky. Stricter wealth taxation, increased rent controls, and growing sustainability obligations (eventually including a ban on renting out the most energy-inefficient properties) require much more rigorous asset selection. Gross yields remain attractive in some cities, but the risk-return trade-off must now incorporate an unprecedented level of regulatory complexity.
In the short term, household distress due to shortages and high rents must be addressed through targeted aid and smoother residential pathways (e.g., solutions for seniors). In the medium to long term, the absolute priority is to significantly increase housing production while respecting growing climate and environmental constraints.
The Dutch real estate market is therefore neither in uncontrolled overheating nor on the verge of collapse. It is moving along a narrow edge: that of a very relative normalization, in a structural context of scarcity, energy transition, and deep reforms. For buyers, tenants, and investors, the key is less about “guessing the right timing” and more about understanding, in detail, these new rules of the game.
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Cyril Jarnias is an independent expert in international wealth management with over 20 years of experience. As an expatriate himself, he is dedicated to helping individuals and business leaders build, protect, and pass on their wealth with complete peace of mind.
On his website, cyriljarnias.com, he shares his expertise on international real estate, offshore company formation, and expatriation.
Thanks to his expertise, he offers sound advice to optimize his clients' wealth management. Cyril Jarnias is also recognized for his appearances in many prestigious media outlets such as BFM Business, les Français de l’étranger, Le Figaro, Les Echos, and Mieux vivre votre argent, where he shares his knowledge and know-how in wealth management.
