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Deloitte Property Index - Overview of European Residential Markets

Belgian residential property prices increase

Deloitte’s Property Index, an overview of European residential markets, reveals that residential property prices in Belgium increased by approximately 2% compared to 2012.

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Brussels, 16 June 2014 – Deloitte’s Property Index, an overview of European residential markets, reveals that residential property prices in Belgium increased by approximately 2% compared to 2012. The highest sale prices for residential property can be found in Brussels, with statistics indicating a significant premium compared to other main cities like Antwerp and Ghent.

This third edition of the Deloitte Property Index, which analyses factors influencing the development of residential markets and compares residential property prices in selected countries and cities, concludes that the threat of possible heavier future taxation of real estate, especially with regards to the tax deductibility of mortgage-related costs, could impact the residential real estate market in Belgium in 2014.

Frédéric Sohet, Real Estate & Construction Industry Leader, Deloitte Belgium: “The Property Index highlights important trends in the residential markets and provides an invaluable insight into how Europeans live - and at what costs. In this edition, we continue to see how the European economy impacts the residential markets. The current more positive outlook on the European economic environment may help boost the real estate market in the coming year, but regional developments, such as future taxation in Belgium, remain important influencers.”    

The average transaction price of a new dwelling in Belgium rose to EUR 2,100 per m²
While property prices for new dwellings decreased significantly in countries such as Spain (-14%) and Italy (-5%) compared to 2012, prices in Belgium increased by approximately 2% to EUR 2,100 per square meter. The moderate annual increase in prices seen historically on the Belgian market is expected to continue in 2014 in line with inflation. The Netherlands, Ireland, Denmark and Austria also have an average realised price of EUR 2,000 per square meter. The highest share of large apartments in terms of number of rooms was found in Belgium, Ireland and Spain.

The affordability of housing index is 3.6 in Belgium compared to 8.5 in the UK
The most affordable own housing was recorded in Denmark, Germany and Portugal. They are followed by a group of countries including Belgium, the Netherlands, Ireland, Spain and Austria, with affordable own housing ranging from 3.6 to 5.6 years of annual gross salaries required to buy a standard-sized new dwelling of 70 m². The highest number of gross annual salaries is needed in France (7.9), the UK (8.5) and Russia (10.4).

Belgium’s housing stock remains below EU average
In 2013, the average EU housing stock increased slightly to reach almost 476 apartments per 1,000 inhabitants. Spain boasts the largest housing stock out of the compared countries (18% above the EU average), whereas Poland has the smallest (25% below the EU average). The housing stock in Belgium remains 16% below the European average.

The intensity of residential development rises in Belgium
Belgium remains 22% above the European average with the number of issued permits in 2013 increasing by 2.3% compared to 2012. Among European countries, France had the highest housing development intensity (5 completed apartments per 1,000 inhabitants), closely followed by Austria (4.7 completed apartments per 1,000 inhabitants). Overall, the housing development intensity of the European Union continued to decline with the number of completed apartments per 1,000 citizens decreasing from 3.9 in 2011 and 3.3 in 2012 to 2.5 in 2013.
The country with the highest housing development intensity in 2013 was Russia (6.5 completed apartments per 1,000 inhabitants).

Belgium’s residential debt per capita comparable to France and Germany
The newest EU joiners, the transitive economies of Hungary, Poland and Czech Republic, with the lowest salaries, have the lowest residential debt per capita in the EU. The debt in the Netherlands (EUR 48,500) is 4 times higher than Austria (EUR 12,300), while Belgium (EUR 20,500) is comparable to France and Germany.
While the EU average indebtedness of the housing stock – or the proportion of the volume of mortgage loans to GDP - is 52%, Belgium reports indebtedness of 48.8%.

Jean-Paul Loozen, Real Estate & Construction Industry Leader, Deloitte EMEA: “In comparison with the other countries analysed, Belgium’s residential market remains relatively favourable and the outlook is positive.”

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Frédéric Sohet

Real Estate Industry Leader

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