Annual house price to rent ratio in the Netherlands 1970-2020
This ratio, based on the nominal purchase price of a house divided by the annual rent of a similar place, is normally used to show the undervaluation or overvaluation of real estate prices and aims to give an indication whether or not its cheaper to buy or to rent residential property. The source mentions that values over 100 indicate that the present price-rent ratio, or price-income ratio, is above its long-run norms. This provides an indication of possible housing market pressures.