Disposable income increased in the third quarter due to wage increases

People in the Netherlands had more money to spend in the third quarter of the year on average this year, even though life has become more expensive for many people. According to Statistics Netherlands (CBS), this is mainly because of the higher collective bargaining agreements (cao). However, the mortgage debts also increased in the last quarter.

The so-called real disposable income was 1.5 percent higher in the third quarter than a year earlier. That is the increase in available income, adjusted for price increases.

The average income of employees and self-employed people was also higher than in the third quarter of 2023. Total employee compensation increased by seven percent. Self-employed income increased particularly in the health care sector. The number of employee jobs grew by 0.5 percent, and collective bargaining agreement wages were 6.9 percent higher.

The increase in the total benefits received was 8.3 percent. This is because the benefits are often linked to the minimum wage, which increased by seven percent compared to a year earlier. People had to pay an average of 13.3 percent more in taxes and social contributions.

The mortgage debt of all Netherlands residents grew by 10.1 billion euros compared to the previous quarter. The mortgage debt is increasing faster than last year because the housing prices were higher in the third quarter than a year earlier, and more homes are being sold.

As the economy grew faster, mortgage debt as a percentage of gross domestic product (GDP) declined from 79.2 percent in the second quarter to 79 percent in the third quarter. This is the lowest level since the third quarter of 2001.