Annual rent increase lower than inflation

13/08/2001 10:00

House rents were raised by an average 2.7% in the Netherlands on 1 July 2001. This is one of the smallest increases in the last 24 years. The increase was also substantially lower than the rate of inflation in July.

Since 1978, rent increases are implemented once a year in the Netherlands, on 1 July. The largest increase was measured in 1982: 8.4%. In 1986 and in 2000 the increases were 2.6%, the lowest increases in the 24 years concerned. Rent levels rose strongly in the period 1978-1983, but much less strongly between 1984 and 1990. In 1991 the increases were 5.9% on average, and subsequently fell slightly annually until 2000. In 2001 the rise was slightly up on 2000.

Inflation rate and rent increases, July

Inflation rate and rent increases, July

In general, rent increases have been higher than the rate of inflation in the last 24 years. The difference was largest in 1983 when rents increased by 6.8% and consumer prices by 2.5%.

The highest rate of inflation was measured in 1980 (7.5%), while rents rose by slightly less: 7.2%. The increase in rents remained below inflation for the second time since 1978 in 2000, though by a mere 0.2 of a percent point. In 2001 the difference is much larger. Inflation rocketed to 4.6% in July, leaving the rent increase 1.9 percent points behind.

Difference between inflation and rent increase, July

Difference between inflation and rent increase, July

Overall, rents have increased by 199% in the last 24 years, an average 4.7% a year. Cumulative inflation in this period is 99%, an average 2.9% a year. So, prices have doubled while rent levels have tripled in the same period.

Jan Walschots