Annual house price to rent ratio in the Netherlands 1970-2020
The annual house price to rent ratio in the Netherlands has on an upwards trend since 2015. In 2020, the ratio reached an index value of 128 index points, exceeding the OECD average.
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.
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.
