Dutch consumers reluctant to buy houses

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Dutch consumers are currently even more reluctant to buy a house than during the economic crisis which lasted from 1978 until 1982.

The above statement was made by ING Bank’s economic bureau in its quarterly report on the housing market. A survey by the Dutch statistics office Statistics Netherlands CBS shows that nine in every ten Dutch citizens will “definitely not” buy a house - or have one built - in the coming year.

According to the ING economists "The recent reduction of the transfer tax rate appears to be having some effect, but the lack of confidence among potential buyers is having a serious impact on the housing market.” They don’t expect the tax cut will prove a miracle cure, particularly when it is only a temporary measure.

US In the United States, sales increased strongly when the government introduced a temporary tax cut in 2009 and 2010, but slumped as soon as the measure expired.The tax incentive did not generate additional demand; the increase in sales was mostly due to people who bought a house earlier than they had originally planned to take advantage of the tax cut.Whether the reduction of the transfer tax in the Netherlands will actually have any effect will not become clear until the publication of the housing market figures for September and October.

Homes sold In July, the number of homes sold dropped for the fifth month in a row to reach the lowest level since 1992. While about 18,000 houses a month were sold in the first six months of 2011, at present less than 10,000 houses a month change hands. ING expects housing prices will drop by two percent this year and predicts a further 1.5-percent reduction for next year.

© Radio Netherlands Worldwide

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