Dutch house prices have remained flat the last few months. The price index has been stuck near 85 since April of this year. According to CBS year over year home prices dropped 4% last month. Home prices are now 20.3% below the record of August 2008.
CBS: Prices of existing owner-occupied dwellings
CBS: Price index of existing owner-occupied dwellings
Corrected for inflation house prices haven’t moved either as Mathijs Bouman showed with another chart on Twitter. According to the chart below home prices corrected for inflation are at the same level as in October 1999. In a post I made about Dutch house prices in June of this year I also noted that the price, corrected for inflation, was the same as in October 1999. While we can speculate about what home prices will do next right now it looks like we have found a temporary bottom at the very least.
Bouman: Dutch house prices corrected for inflation
Vincent Foster shared a chart today on Twitter that shows that inflation (CPI) in the US is now at the lowest point since 1965 if you exclude the short deflationary period in 2008 and 2009. Inflation is at this moment only 1% year over year.
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)
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.
Because of these VAT rate hikes inflation in The Netherlands is now double that of the European average. PDF