Spending power rises for most, house prices begin to stabilise

A small increase in spending power for most people, an improvement in consumer confidence and signs house prices are stabilising are helping boost hopes of an economic recovery in the Netherlands.

After four years of declining spending power, many Dutch households will have more to spend this year, the family spending institute Nibud said on Tuesday.

Working families with low or medium incomes in particular will benefit from government policy changes, Nibud said.

However, pensioners and households with one working parent will be worse off by around €20 a month. Single people earning over €50,000 will also have less to spend, Nibud said.

Cuts in health insurance premiums, low inflation and the cut in the basic tax rate have all benefited poorer families, Nibud said.

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Meanwhile, new figures from the national statistics office CBS show continued steady improvement in consumer confidence, which has risen since July 2013. In January, the index rose by five points but still remains at -12, meaning the pessimists outweigh the optimists.

The CBS also said house prices are beginning to stablise. The price of a home fell by 6% over 2013, but most of the impact was felt in the first half, the CBS said.

The 2013 price drop showed strong regional variations, with houses retaining most of their value in Zeeland (-3%). In Friesland, Drenthe, Noord-Holland, Gelderland and Noord-Brabant house price values fell 7% year-on-year.

Economic affairs minister Henk Kamp says in Tuesday’s Financieele Dagblad the economy may well return to pre-crisis levels, with structural growth of 1.5%, although he declined to give exact figures.

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