Pale rays of sunshine

Over the past three years the Netherlands DIY sector has forfeited ten per cent of its sales, according to GfK market researchers. The first six months of 2011 are still 1.5 per cent behind last year’s standards of performance. Nevertheless, industry experts believe that the dark clouds in the DIY sky are slowly dispersing. Although the economic crisis gradually came to an end last year, so leading to a certain degree of optimism, there has been no turnaround for the DIY sector in the Netherlands. Even in the first half of 2011 the picture still remains fundamentally unchanged. But there are indications of a positive momentum in the coming. House prices are still moving downward. The Dutch government has undertaken temporary measures in the area of transfer taxes, which apply when an existing house is purchased: a certain percentage rate of tax must be paid in order to acquire the property. This percentage has been reduced, with the aim of encouraging people to move house. The governmental incentive has not really taken effect so far – the population of the Netherlands appears not to be particularly mobile for the time being. What did the sector look like in 2010? In concrete terms, sales came to € 3.98 bn. That means a decline of the above-mentioned ten per cent by comparison with 2007, the record year. The DIY sector is feeling the stagnation in the building industry. In spite of the negative data and the uncertainty about the long-term outlook for tax relief on mortgage interest payments (you can deduct mortgage interest payments from your income tax in the Netherlands), the estate agents’ association is optimistic about the trend in house-moving figures. The number of homes sold in July rose by 15 per cent compared with the same month in 2010, and the association’s expectations for the third quarter amount to an increase of ten per cent. These are optimistic developments that the sector hopes will also have an influence on the DIY market in the Netherlands. As regards the construction industry, it is moving forward with difficulty at present, the number of new homes is still not increasing substantially, and the political situation in the Netherlands is marked by austerity measures. It is touch and go with the tax relief offered on mortgage interest payments, and this could lead to increased costs with a new government in power. But the barometer is moving more in the direction of sunny weather than was the case six months ago. Download: