Growing divide between buyers and renters on housing market

• Housing cost ratios fall in almost all regions for both buyers and renters

• Existing homeowners benefit, while first-time buyers and young renters fall behind

• In large cities, first-time buyers and young renters pay more for less living space

Affordability seems to have improved, but big differences between households

Between 2019 and 2025, housing cost ratios – which measure the percentage of income spent on housing – fell in almost all regions for both homeowners and renters in the private rental sector. On the face of it, living in the Netherlands seems to have become more affordable in recent years. Over this period, incomes rose faster than mortgage and rent costs. But this overall picture hides a growing gap between households in terms of affordability and housing quality. Existing homeowners are benefitting most, while first-time buyers and young renters are seeing their housing cost ratios fall more slowly. In some regions, especially in large cities, they are even on the rise. This is ABN AMRO’s conclusion in the latest thematic publication of the Housing Market Monitor, in which it maps the housing costs of homeowners and private-sector renters.

Improvement in housing cost ratios most evident for existing homeowners

The improved affordability is most evident for existing homeowners. Their housing cost ratios fell between 2019 and 2025 because their incomes increased over this period while their mortgage costs remained the same or declined. As a result, this group can spend 2 to 3 percent of their net income on other things. For first-time buyers, who are usually less financially well off, the effect is smaller, at around 1 percentage point. The research also shows that first-time buyers have higher housing costs than existing homeowners in all regions. In large cities, their position has in fact worsened. In Amsterdam, they spend up to 2 percentage points more of their income on housing than in 2019. First-time buyers also pay more on average for less space. Their homes are around 10 to 15 m² smaller than those of existing homeowners, while in Amsterdam they spend an average of 5,000 euros more per year on housing and in Utrecht 3,000 euros more.

Renting or buying increasingly determines how households fare in the housing market

There is also growing inequality between renters and homeowners. Private-sector renters have structurally higher housing cost ratios (28 to 38 percent) than homeowners (20 to 28 percent). Young renters are seeing their position worsen in Amsterdam, Rotterdam and Utrecht, while older renters in all regions are benefitting from improved affordability. First-time buyers have a higher income on average than peers who rent, and their housing costs are actually often lower. "We can see a substantial income gap between the private rental sector and the owner-occupied market. This makes it increasingly difficult to move from renting to buying," says Mike Langen, Senior Housing Market Economist at ABN AMRO. "Given the high house prices, first-time buyers need to have more equity to be able to buy. At the same time, our analysis shows that the improvement in housing cost ratios is not evenly distributed. Existing homeowners are benefitting most, while first-time buyers and young renters – especially in the four largest cities – have actually seen their housing cost ratios go up. We also found that younger buyers and renters are achieving their seemingly stable or falling housing costs by living in smaller homes. If you adjust their housing costs for the space they live in, they are actually paying more and more per square metre. So although housing cost ratios fell overall between 2019 and 2025, it is important to distinguish between these groups. Behind this picture lies an ever-widening gap in affordability and housing quality between groups of households in the Netherlands. Whether people benefit in the housing market increasingly depends on their age, housing tenure – whether they own or rent – and the region where they live. Policymakers must explicitly take this into account when developing new housing market policy. Good housing policy should not only focus on house prices, but also on housing quality."