Monthly Archives: July 2013

Dutch House Prices Adjusted For Inflation Are Near The Level Of The Last Top in The 1970s

The Dallas Federal Reserve updated their International House Price Database with the number for the first quarter of 2013 last week. They are tracking house prices since 1975 so this provides for nice opportunity to see where we are standing on a long term basis.

In a in a recent post I mentioned that house prices in the Netherlands are now at 1999 levels adjusted for inflation (blogpost).

These new released numbers from the Dallas Fed show that the Dutch Real House Price Index (house prices adjusted for inflation) are approaching the levels of the last top in 1978. Although I never expect (and hope) that house prices will approach the same level as the bottom of 1985 but it wil be interesting to see if prices will go lower than the top in the 1970s. My argument for this is that Dutch society went in a few decades from having almost only single-income households to now the majority being two-income households. In 2009 the CBS reported that two-income households made up 57% of all households. Two-income households make more money than single-income households. Because of this the amount of money the average household can spend is a lot higher these days and thus they are able to afford a higher price for their house. Source: CBS (PDF)

Dutch house prices adjusted for inflation long term nederlandse huizenprijzen gecorrigeerd voor inflatie lange termijn

Just for reference here is also the chart with the Dutch House Price Index from the Dallas Fed.

Dutch House price index dallas fed long term nederlandse huizenprijzen index lange termijn

Dutch Inflation Near Highest Point In 10 Years

Today the new inflation numbers of the Dutch statistical bureau CBS arrived. According to CBS annual Dutch inflation is now at 2.9%. The main cause for this is the fact that the Dutch government decided to increase the value added tax (VAT) rate in october 2012. (credit: chart)

Nederlandse inflatie juni 2013 Dutch inflation june 2005 - 2013 short term month over month

If you look at the longer term inflation is near the highest point in 10 years. It is even higher now then it was for a big part during the 1990’s. According to CBS Dutch inflation averaged 1,89% during 2002 and 2011. Between 1992 and 2002 inflation averaged at 2.61%. The little peak of 4,5% in 2001 was caused by an increase of the Dutch VAT rate.

Nederlandse NL lange termijn inflatie maand over maand Dutch NL long term inflation month over month CBS

Because of these VAT rate hikes inflation in The Netherlands is now double that of the European average. PDF

inflatie nederland eurozone gemiddelde inflation netherlands dutch eurozone