Is the Utrecht housing market cooling down? Funnily enough, this is once again a term lots of people are searching for. Just like the blogs we wrote in 2022 and 2023, when the market was cooling down. Back then the unrest in Ukraine and the resulting rise in interest rates caused quite a substantial cooling. But even after that there were the occasional moments of doubt with a mini dip, only for the market to go full throttle again.
Contents
- A reminder: why did the market keep peaking until 2022?
- Looking back: the cooling of the Utrecht housing market in 2022 and 2023
- Interest rates are rising: the lock-in effect and fewer movers
- New rules: the rental market turned upside down
- What does this mean for the Utrecht market?
- Conclusions: a temporary dip, or is the Utrecht housing market cooling down?
- Conclusion
Since then there have been several important developments that affect buyers and sellers alike, such as rising mortgage rates and new rules on letting and on the taxation of assets. In this follow-up we zoom in on these factors, look at what has changed since the summer and draw our conclusions for Utrecht and Leidsche Rijn.
A reminder: why did the market keep peaking until 2022?
In 2021–2022 the housing market was hotter than ever. More than 100 viewing requests per home? That really wasn't unusual; it was the rule rather than the exception. The mortgage rate was around 1.5% and prices shot up. Movers (people who already own a home) could use their home equity and the low interest rate to move to a bigger house and still end up with lower monthly costs. Sounds crazy, doesn't it? But in 2021 it was often cheaper to take the step to a new house.
We ourselves were looking at a house of around 1 million euros at the time. We were living in a house worth around €600,000, and if we took part of the mortgage on the new house as interest-only, we would pay €300 a month less. While living in a really fantastic house. That sounds incredibly attractive, right? Yes, it does, and that's exactly why demand was so much higher. You moved to a lower interest rate and turned part of your home equity into cash.
This group of ‘searchers’ who buy because it's financially advantageous to make a move are now staying put. Because these days borrowing an extra €300,000 simply means €1,400 more per month. Supply was scarce, even scarcer than now. There were still investors active who bought houses, and investors weren't selling the houses they owned. At the start of 2022 there were only around 400 houses for sale in Utrecht. So demand was even greater and supply even scarcer. Relatively expensive houses were very affordable per month.
Looking back: the cooling of the Utrecht housing market in 2022 and 2023
Our earlier Gusto Casa blogs from August 2022 and March 2023 give a good picture of how the market felt back then. In the autumn of 2022 Utrecht saw the first signs of cooling: the number of serious house hunters fell from about 32,000 to 25,000, while supply rose from some 400 available homes for sale to more than 1,200. Whereas at the start of 2022 houses got an average of 35 viewings and the busiest homes had more than 100 requests, half a year later it was sometimes only five. This really was short-lived. Many people panicked and didn't buy anything. They waited for prices to drop even further. But soon enough (from April 2023) prices started rising again.
In the second quarter of 2022, 1,045 homes were sold in the municipality of Utrecht at an average price per m² of €5,576. Just over half (52.9%) of the buyers were first-time buyers. That combination of rising interest rates, more supply and fewer house hunters meant we were already talking about a breeze blowing through the market back then, but a real turning point never came.
At the start of 2023 the mortgage rate went up even further, rising to around 5%. The monthly cost of a €400,000 mortgage jumped from about €1,439 to €2,147 per month. At the same time, selling prices in Utrecht fell by 15–20% compared with the peak at the end of 2021 and the start of 2022. The balance between supply and demand shifted: in January 2023 there were around 19,750 serious house hunters and some 1,465 homes available; a few months earlier those figures had still been 32,000 and 600.
Really serious differences. A change like that meant buyers hesitated and sellers had to wait longer. The number of viewings fell, overbidding disappeared and on average people bid 1.6% below the asking price. We were all completely amazed. At the same time we also saw asking prices creeping up slightly, because the strategy changed. The time it took to sell a home also rose, to 45 days.
At the same time sustainability and energy efficiency became more and more important: well-insulated apartments and homes with energy label A attracted more buyers than charming but draughty 1930s houses. This was a really strange phenomenon for us estate agents. But the enormous gas prices combined with the higher monthly costs meant that first-time buyers in particular had to make choices. On top of that, mortgage rates then became linked to the energy label. Many families and movers waited to see what the market would do, but as soon as stabilisation came into sight, the number of viewings rose again. In our March 2023 blog we predicted that this would be a temporary pause: the housing market would stabilise, but not fall structurally. What we didn't realise at the time was that it would rise again so quickly.
In June 2023, when we wrote about the question ‘Will prices fall or will they rise?’, it became clear that the market was already bouncing back. At that point there were 21,005 serious house hunters in Utrecht, but only 1,429 homes on the market, although this was far more than in 2021 (of which 516 were actually available). Things were especially crowded in the popular segment between €375,000 and €500,000: around 6,000 people were looking for a house with a garden, at least two bedrooms and solar panels, while at that moment only 48 homes of this kind were for sale. Despite a mortgage rate of about 4.8%, prices in this category rose by 5–10% in a single month in 2023.
Why did prices rise despite the high interest rates? An important factor was wage growth. Because of the high inflation, almost all wages were adjusted at the same time. This meant people could pay more. After all, demand was still high. But in the Netherlands everything comes down to affordability, because we're allowed to borrow 100% and have hardly any extra costs. In 2023 wages rose by about 5.4%, so home buyers could borrow more and therefore bid a little higher.
At the same time many first-time buyers quickly bought a home to take advantage of the jubelton (a tax-free gift). Around the same time an owner-occupancy requirement was also on its way, so investors made sure they quickly bought a home while they still could. These impulses meant the market picked up again in the autumn of 2023.
At the start of 2022 Utrecht had 361,742 inhabitants, and it expects to pass 400,000 inhabitants for the first time in 2028. That is an increase of 1,100 inhabitants per km² in less than twenty years. Because housebuilding is lagging behind, the conclusion is that prices will keep rising in the long term.
This look back shows that the peaks and troughs in the housing market are mainly temporary. But also that there is an overall rise. Rising interest rates slow demand for a while, but as soon as buyers adjust (thanks to higher wages or expectations) the market bounces back. The structural factors, namely strong population growth, a shortage of new-build homes and a limited supply of large family homes, remain the underlying drivers.
That's why the current ‘cooling’ in 2025 also needs to be seen in this context. At most, it's the homes that are slightly less ‘sleek, finished and with good outdoor space’ where the market is cooling, from overheated to lukewarm at best. Because honestly, prices are still extremely high and the market is still rising slightly. There is still a lot of overbidding.
Interest rates are rising: the lock-in effect and fewer movers
The days of 1.5% interest are over. Since 2022 the mortgage rate has risen to around 4%, which means a new mortgage costs hundreds of euros more per month. Funnily enough, I once wrote a blog about the solutions to the pressure on the housing market. Raising interest rates was one of them. After all, we live in very large homes, and housing was relatively cheap for a long time, and for many Dutch people it still is. That changes the behaviour of movers:
- Many homeowners fixed their mortgage rate for years and don't want to give up that low rate. If they move, they have to finance the extra amount at today's higher rate. Research shows that this so-called lock-in effect limits the supply of existing homes. DNB (the Dutch central bank) has found that when mortgage rates rise, fewer households put their home up for sale: in the first quarter of 2024 the number of homes put up for sale was 24% lower than a year earlier.
- An analysis by NVM/Brainbay shows that the historically low supply and reduced confidence in 2021–2023 are the main reason movers are staying put. Although the rise in interest rates wasn't the initial cause of the stagnation, it does play a role in sentiment: the higher rate makes people more cautious. It's no longer advantageous to move up, so people are happy to stay where they are.
- At the same time, movers with a so-called portable mortgage (meeneemhypotheek) could often use their old low rate for part of the new loan. According to the Hypotheekshop, movers with such a portable arrangement pay an average of 2.8% interest, compared with 3.8% for those who need entirely new financing. As a result, many movers are less affected by the rate rise than first-time buyers.
Because of this you also see that the segment above €1,000,000 is under a bit more pressure too. People still have a low interest rate and a lot of home equity, and they've often held on to their first little apartment, which they're now selling because of the Box 3 rules (the Dutch tax on savings and investments) and the Affordable Rent Act (Wet betaalbare huur). So in a house worth €1,500,000 they have monthly costs of around €2,800. A first-time buyer with a €600,000 mortgage pays the same. That shows you straight away why, on average, our housing really isn't that expensive at all ;).
All this means that the more spontaneous moves of previous years (‘it's cheaper to move somewhere bigger’) have disappeared. Moving ‘just because you can, because it's fun and because you can take a step up’ is happening a lot less. What we do see is a big movement of people cashing in their home equity and moving to Spain, to a luxury villa.
Moves now mainly happen when they really have to: a growing family, a divorce or a new job. The result: less supply of large family homes, while demand remains high. At the same time, with the abolition of the jubelton and the shortage of rental homes, you can see a problem. The houses that first-time buyers who want to start a family actually want to buy are now quite expensive. That isn't real cooling; it's more a tightening in a different segment.
New rules: the rental market turned upside down
Besides interest rates, new laws have been introduced over the past year and a half that change the dynamic between renting and buying. These rules mainly affect investors (landlords) and, indirectly, the supply of homes for sale. Is the Utrecht housing market cooling down because of these rules?
The Affordable Rent Act: what impact does it have?
The Affordable Rent Act (Wet betaalbare huur) has applied since 1 July 2024. The act makes the housing valuation system (WWS) binding for mid-rent homes up to 186 points. Since 1 January 2025 municipalities can step in if landlords charge too much rent. According to the ministry, this will eventually bring the rent of 300,000 homes down by an average of €190 a month. Sounds noble, but in Utrecht the investors are selling. As a result there are no rental homes left and there's more supply for sale.
In practice it works out differently: because of the lower maximum rent and stricter rules, returns fall, so many private landlords are selling their homes. In Utrecht it's completely out of proportion. The WOZ values (the municipal property valuations) are far too high. At the same time the houses are small. So on the one hand you're barely allowed to charge any rent, and on the other you have to pay tax in full.
Figures from the Kadaster (the Dutch Land Registry) show that in the second quarter of 2025 investors sold almost 16,400 homes and bought only about 7,800 homes. And these were often homes that were already being let. So exactly nothing was added. It mainly concerns smaller homes for first-time buyers. Investors are selling off apartments of up to 95 m² in particular and are more often buying larger homes, which can still be let in the free (unregulated) sector.
This wave of sell-offs (uitponding) creates more supply on the sales market (mainly apartments) but makes the rental market even tighter. It's truly heartbreaking how many desperate emails we get from people who can no longer find a home and aren't able to buy. Pararius reported that after the act came in, supply in the mid-rent segment fell by 20.2% in 2024, while demand rose by 25.4%. As a result, mid-rent homes in Utrecht receive more than 400 responses per home on average. Crazy, isn't it? I know colleagues who no longer take on clients looking for rental homes under €2,500.
In short: on paper the act protects tenants, but in practice it creates extreme scarcity and homes shift from the rental market to the sales market. There's a little more supply, so house prices are rising just a bit less quickly. This looks like a kind of cooling. But that's also because the figures give a distorted picture. The quality of the supply isn't taken into account in the figures. Former rental homes are often of slightly lower quality, which automatically leads to a slightly lower price per m² as well. They are also often houses in neighbourhoods where people don't necessarily want to buy a home, but are perfectly happy to rent for a couple of years.
Buy-to-let protection
Since 2022 municipalities have been able to introduce buy-to-let protection (opkoopbescherming): owner-occupied homes below a certain WOZ value may not simply be rented out. Utrecht applies this rule and raised the threshold to a WOZ value of €565,000 from 1 July 2024. Anyone who buys a house below this threshold has to live in it themselves (with a few exceptions). According to the municipality of Utrecht, this measure is very effective: the number of homes bought up by investors fell from more than 500 in 2021 to just 14 in the first half of 2024. But at the same time the plans changed with the Affordable Rent Act and the changes to Box 3. This means that buying a home to let out is no longer attractive at all.
Tenants also get a permanent contract straight away. Politics is so fickle that investors no longer want to burn their fingers. At the same time the share of first-time buyers rose from 47% to 58%. This pushes investors out of the market, so more affordable homes remain available for owner-occupiers.
But honestly, this sounds incredibly noble. What do we see in practice? The home was let on the market for €1,350. The home's current free-market value? €450,000. What are the monthly costs if you buy this home? €2,000. OK, you still get mortgage interest relief and you're paying off the loan. But you also have to cough up more money every month and pay for the maintenance yourself. And sometimes a home like this is now even worth €550,000. Then the monthly cost is €2,450. This sounds exceptional, but it's what we're seeing.
Box 3 tax and a new system
Besides rent regulation, the wealth tax (Box 3) has also been tightened. The transitional regime uses a notional return for “other assets”, including let homes, of around 5.88% in 2025. Debts only partly reduce that return. As a result, private landlords often pay tax on a return they don't actually achieve. In 2026 this notional return will even be 7.78%. In addition, the vacant-value ratio (leegwaarderatio, used to value let homes) has been cut sharply since 2024, so let homes are valued higher for tax purposes.
The government is also working on a new Box 3 system from 2028, under which tax will be levied on the actual return. And actual return sounds fair. Honestly, man, do I love fairness. But it also means they'll include the increase in value, which you can't immediately turn into cash. You might even end up in negative equity afterwards. This makes the tax outcome less predictable. For investors this increases the uncertainty; many are already playing it safe and selling. The Kadaster notes that the gap between sales and purchases by private investors has been growing rapidly since 2023. Starting a company in Spain really wasn't on our to-do list. But these changes meant it happened anyway.
What does this mean for the Utrecht market?
The effect of interest rates and regulation differs by neighbourhood and by segment:
- More supply of small apartments: in Pijlsweerd, Lombok, Ondiep and Zuilen there was already a relatively large supply of private rental homes. With the Affordable Rent Act and the heavier tax burden, these homes are being sold en masse. This increases the number of transactions and makes the average selling price appear to fall, while in most cases the price per m² is actually rising, an effect we've seen before. For first-time buyers this means more choice, but also lots of competition and still-high prices per m².
- Less supply of family homes: because of the lock-in effect and the buy-to-let protection, movers are less inclined to move, so spacious (1930s) houses remain scarce. Houses that do come onto the market still attract multiple bids and sell for an average of 12–13% above the asking price.
- Leidsche Rijn vs. Utrecht city: in Leidsche Rijn (including Vleuten-De Meern) more new-build homes are being completed and the scarcity indicator is slightly higher (around 1.5). The wave of sell-offs is noticeable there, but less extreme than in the older neighbourhoods. In the city of Utrecht the scarcity indicator fluctuates between 0.7 and 1.4, so the market remains tight.
- The rental market remains tight: because investors are selling and buy-to-let protection makes letting harder, the number of rental homes is actually decreasing. Mid-rent apartments receive hundreds of responses and are online for only a week on average. That pushes some tenants towards buying; they are now competing with first-time buyers. The tiny apartments and the apartments in neighbourhoods such as Kanaleneiland or Overvecht are being sold to these former tenants. Not always a match for what people want.
Conclusions: a temporary dip, or is the Utrecht housing market cooling down?
Taken together, the figures show that the current cooling is mainly an illusion. The fact that the average selling price sometimes falls is mainly because a lot of small (former rental) homes are being sold. If you look at the underlying scarcity, the price per m² and the overbidding, the market remains overheated. What is changing is who's active and what's being sold:
- Higher interest rates slow down movement through the market and mean movers stay put for longer. This causes a shortage of smaller family homes.
- The new laws and regulations (the Affordable Rent Act, buy-to-let protection, Box 3) are driving landlords out of the market. They're now taking their capital abroad. This actually creates more supply of small apartments, but the rental stock disappears and competition on the rental market increases.
- In Pijlsweerd, Lombok, Ondiep and Zuilen this means first-time buyers get more choice, but they still have to bid sharply because prices per m² keep rising and the scarcity is extreme.
- Leidsche Rijn and Vleuten/De Meern remain slightly less tight markets thanks to new builds, but there too people are overbidding heavily and the wave of sell-offs is noticeable. What you mainly notice here is that more expats are coming onto the market, because they can no longer rent.
Conclusion
There is no structural cooling, just a temporary slowdown in price growth. The mortgage interest deduction is also causing some panic among buyers for the time being. When that storm dies down, everyone will realise again that competition is flaring up. Especially once the biggest flow of sold-off rental homes has gone. Then supply will be tighter again. The combination of the housing shortage, wage increases and demographic growth keeps demand strong. Interest rates and the new rules do change the make-up of supply, though. That creates opportunities for those who understand where the movement is. Anyone who responds to the wave of sell-offs in time can buy a lovely starter home, while owners of well-maintained family homes or ground-floor apartments with large gardens are still sitting on a gold mine.
And a little tip: many investors want to get rid of their home before December 2025, which gives you some room when bidding if you can act quickly.
