Homes are the main component of household wealth
For most homeowners, the home constitutes the main component of their household wealth. House prices in the Netherlands have been fluctuating significantly since the turn of the century, which raises the question of how these movements have affected private consumption. Chart 1 presents the developments of real house prices and real private consumption from 2000 onwards and suggests there is a correlation between these trends.
Chart 1 - Relationship between house prices and private consumption
Index; 2008Q3 = 100; real*