Economy

Dutch house prices rose by nearly 4 per cent year-on-year in July to reach an average of €500,988, maintaining a steady pace of growth whilst market activity saw a 5 per cent boost with over 22,000 sales completed. Despite the annual rise, overall house price inflation has continued to level off since late 2024, largely driven by stricter rental regulations that have prompted private landlords to sell off former buy-to-let properties. This influx of more affordable housing stock onto the open market has expanded supply and helped ease the upward pressure on average property prices.

Dutch business investment bounced back by 2.7 per cent year-on-year in June following consecutive declines in April and May, driven by increased spending on commercial property and road transport fleets like lorries and buses. Although outlay on machinery, aircraft, and shipping dropped during the same period, data from Statistics Netherlands (CBS) indicates that broader investment conditions continued to improve into August, bolstered by stronger stock market performance and an easing of negative consumer sentiment.

The AEX index in Amsterdam edged 0.4 per cent higher on Friday morning, recovering slightly despite broader market anxiety surrounding rising US government bond yields and high national debt. European indices posted modest gains, spearheaded by semiconductor giants ASMI, Besi, and ASML, which rose up to 2.4 per cent. However, investor sentiment remained cautious following Thursday's sharp drop on Wall Street and mixed overnight trading across Asian markets, where rising energy costs stoked Japanese inflation. Meanwhile, corporate moves dominated the headlines, highlighted by EV charging firm Alfen tumbling over 3 per cent after a broker downgrade, and Italy’s Banca Monte dei Paschi seeking strategic acquisitions to block a potential takeover by rival Intesa.

Dutch industry reported its strongest turnover growth in more than three years during the second quarter of 2026. Growth was driven by strong performance in the petroleum sector, while some industries, including food and beverages, saw turnover decline.

The cabinet has begun talks with opposition parties to secure support for next year’s budget, but major disagreements remain. PRO leader Jesse Klaver says there has been no progress on his demand to drop social security cuts, while the coalition races to meet a key budget deadline.

Dutch household purchasing power is set to contract by 0.3% in 2027 as planned income tax increases take effect, according to new forecasts from the Netherlands Bureau for Economic Policy Analysis (CPB). While 2026 will offer brief respite with a modest 0.6% gain as pay growth outpaces inflation, almost all demographics face a squeeze by 2027, with childless families hit hardest. Pensioners remain the main exception due to recent pension indexation reforms, while expanded housing benefit eligibility will help keep national poverty levels broadly stable at around 460,000 to 470,000 people.

Amsterdam’s AEX index extended its record rally on Friday morning, rising 0.3% to 1,123.44 points after opening, driven by ~3% gains in RELX and Wolters Kluwer. Broader market sentiment was bolstered by Wall Street's overnight record high, where optimism mounted that the US Federal Reserve will hold interest rates steady in September. Meanwhile, the MidKap added 0.4% and Frankfurt gained 0.6%, while markets in Paris and London remained virtually flat.

A new ECB survey shows a slight rebound in cash acceptance: 92% of businesses now allow cash payments, reversing the downward trend seen during and after the pandemic.