The Netherlands Housing Crisis: Why Rents Keep Rising

The Netherlands housing crisis is getting worse. The country has a shortage of 410,000 homes, rents in the private sector rose 7.3 percent in the first quarter of 2026, and the government has a target of building 100,000 new homes per year but has never come close to reaching it. And in May 2026, the International Monetary Fund formally told the Dutch government its current approach is not working.

For anyone living in or moving to the Netherlands, this crisis is not an abstract policy debate. It determines whether you can find somewhere affordable to live, how much of your salary goes on rent, and how long you might wait before securing a property.

How Bad Is It?

Research by Capital Value and ABF Research, which calculates housing data for the Dutch government, found the Netherlands now has 410,000 fewer homes than households, up from a shortage of 400,000 the previous year. Without further government intervention, Capital Value forecasts the shortage could reach 450,000 homes by 2027.

In Amsterdam, the shortage is considerably more severe. The city alone faces a deficit of 47,100 homes, equivalent to 6.4 percent of its total housing stock. Private landlords have sold approximately 5,000 rental properties in Amsterdam in recent years as renting became less profitable under tightening regulation. That stock has not been replaced.

Free-sector rentals in major cities stay listed for an average of just 18 days. An average of 57 people respond to every available rental property nationwide.

How Did It Get This Way?

The crisis has multiple roots, some decades in the making.

Underbuilding since 2012. The Netherlands effectively stopped building during the financial crisis and never fully recovered. Only 69,200 new homes were completed in 2025, well below the government’s target of 100,000 per year. Completions are expected to rise to around 88,400 in 2026 but whether that pace can be sustained remains uncertain.

The nitrogen crisis. In 2019, the Dutch Council of State ruled that the government’s nitrogen policy violated EU environmental law, immediately freezing thousands of construction permits near protected Natura 2000 nature areas. Plans for up to 244,000 new homes have since been affected by nitrogen-related permit issues. The Dutch government’s coalition agreement acknowledges resolving the nitrogen deadlock as essential to unlocking housing construction.

Landlords selling up. The introduction of the Wet Betaalbare Huur (Affordable Rent Act), which capped rents on mid-market properties, reduced returns for private landlords. Many responded by selling rather than continuing to rent. Over 26,000 rental homes have been sold through individual unit sales over the past four quarters, according to Capital Value. Rental supply is shrinking precisely in the most strained markets.

Grid congestion. Energy infrastructure constraints are blocking new housing developments in parts of the country. Developers cannot connect new-build properties to the electricity grid in some areas, halting projects that already have planning approval.

What the IMF Said

In its annual assessment of the Dutch economy published in May 2026, the IMF identified housing as one of several binding constraints weighing on Dutch economic growth. The Fund was direct in its assessment.

It called for an overhaul of rental market regulation and stronger financial incentives for mid-segment private developers to durably address the housing shortage. It said simplifying land-use rules, reducing fragmentation in local building regulations, and limiting construction objections could materially improve supply.

On housing finance, the IMF recommended lowering maximum loan-to-value limits and gradually phasing out the mortgage interest deduction, which it said was putting upward pressure on house prices and hurting affordability. IMF mission chief Fabian Bornhorst described the deduction as an expensive measure that should be gradually wound down.

The Affordable Rent Act: Intended to Help, Complicated in Practice

The Wet Betaalbare Huur, which came into full effect in 2026, caps rents on properties scoring under 187 points in the government’s WWS valuation system at approximately €1,228 per month. The intention was to protect tenants from runaway rents in the mid-market.

The unintended consequence has been a reduction in rental supply. Developers argue that with high construction costs, labour shortages in the building sector, and the new rent caps, they cannot achieve the returns required by institutional investors. Several major housing projects have been cancelled or delayed as a result.

The political difficulty is real. No government wants to be seen allowing rents to rise. But without sufficient returns, private investment in new rental housing is not materialising. The supply side is being squeezed from multiple directions at once.

What It Means for Expats

For expats arriving in the Netherlands the practical implications are clear.

Expect competition. In major cities, good rental properties disappear within days. Have your documents ready before you start viewing: proof of income, employer letter, and BSN if you have it. See our gemeente registration guide for what you will need once you have an address.

Budget realistically. The average rent for a one-bedroom apartment in Amsterdam sits between €1,800 and €2,400 per month in the city centre. Rotterdam and The Hague offer meaningfully better value. See our cost of living guide for a full city by city breakdown.

Know your rights. If you are renting a mid-market property and believe you are paying above the legal cap, you can challenge your rent at the Huurcommissie within six months of signing your contract.

Consider smaller cities. Eindhoven, Arnhem, Tilburg, and Groningen offer considerably lower rents than the Randstad. High-speed rail connections make commuting to Amsterdam or Utrecht viable for many roles, and the quality of life in these cities is high.

What Comes Next

House prices are forecast to rise 4 to 5 percent in 2026, down from 8 to 9 percent the previous year, as the wave of landlord property sales that temporarily boosted supply in 2025 stabilises.

The government’s path forward involves resolving the nitrogen deadlock, streamlining planning processes, and creating better financial conditions for developers to build mid-market rental properties. Progress has been slow on all three fronts. The government’s own target of 100,000 homes per year has never been met and experts are sceptical it is achievable in the near term given the structural obstacles in place. ABF Research projects the housing shortage will remain at 3.9 percent of total housing stock in 2031, well above the government’s target of 2 percent.

For renters, the outlook is that conditions will remain tight through at least 2027. Meaningful supply increases are unlikely before new-build projects currently in the pipeline begin completing.

Summary

The Dutch housing crisis is structural, deep-rooted, and not going away quickly. A shortage of 410,000 homes, a nitrogen deadlock freezing construction permits, declining rental stock in major cities, and persistently rising rents are the defining features of the market right now. The IMF has formally called for reform. The government has targets but faces significant obstacles. For expats, the message is to plan carefully, budget generously, and act fast when a good property comes up.