Current status of rental market during Covid-19

19-7-2021 — 

We have now been dealing with Covid-19 for over 16 months. We receive many questions from landlords and investors about the state of the rental market.
Unlike the owner-occupied market, which is now completely unhinged, the rental market is definitely suffering from Covid-19. Especially in the big cities where normally many expats live. After all, due to travel restrictions, expats were not allowed or did not want to come to the Netherlands.

Other target group
Nevertheless, the rental market is still going strong. Only the prices are a bit lower and the target groups have shifted a bit for us. We still rent out a lot to expats. But now mainly to expats who were already living here and, now that prices have dropped a bit and there is a lot of supply, have seized their chance to live bigger and/or cheaper. And we now rent out, more often than usual, to Dutch people.

Candidates now often have a notice period
One consequence of these 'new' target groups, however, is that most candidates have a notice period of one calendar month, because they already have a rental home. They can therefore not, like an incoming expat, simply move whenever they want.
Do you get a property vacant? If so, please let us know as soon as possible. After all, there now may be more time between finding the tenant and the actual moment of moving in. Moreover, we generally need more viewings to find the right tenant. Prospective tenants have plenty of choice now, are not in a hurry and take the time to view several properties before making a decision.

Companies are recruiting again
The new expats, who were not yet living here, are often from European countries. After all, they can travel more easily than f.i. an American, who has to deal with travel restrictions. We did hear recently that Booking.com, traditionally one of the largest expat companies in the region, is again recruiting staff. Gradually, we are also seeing the number of listed rental properties drop a bit again, ultimately leaving less choice for the searchers. We therefore feel that the market is stabilizing and that rental prices are no longer falling.

Of course, a new Corona outbreak or travel restrictions could change the situation...

Rental prices luxury segment
We do see something remarkable happening to rental prices. Since the start of Corona, smaller properties are less in demand and they now also generate less rent. Before Corona, a small house of 50 m2 in Amsterdam, depending on its location, would fetch at least € 1400 in rent, but now rents for those properties are sometimes lowered with € 150-250. Especially the properties that need some attention. So here again the advice to make sure that your property, and if applicable the furniture, is in good condition and can compete with the competition.

The more expensive properties in the luxury segment, on the other hand, actually just rent out like their is no Covid-19. That may make a difference of a few percent in rent, but we are surprised that we actually see little change there.