Belgium sees sharp decline in property sales

The Belgian housing market appears to be contracting, according to the results of the Fédération du notariat’s (Fednot) property barometer, though prices remain on the rise.

Property sales fell by 15.2% between 2022 and 2023, with the sharpest decline in Flanders. Flanders reported a loss of 16.9%, while Brussels and Wallonia saw falls of 12.4% and 12.1% respectively.

Property transactions in 2023 were still 11.2% higher than in 2020, during the coronavirus pandemic, and the cost of housing continues to climb.

“Rising interest rates and the general economic situation have clearly caused the market to cool down,” said Renaud Grégoire, notary and spokesman for Notaire.be.

“In 2023, there were just over 210,000 sales in our country. In 2022, there were around 248,000 sales.

"We're still in a waiting period. The market has not yet fully digested the rise in mortgage interest rates and the increase in the price of raw materials and building materials."

Grégoire said the market still seems to be waiting for an upturn, which “is unlikely to come”. Fednot expects the market to regain some momentum
in the second half of 2024.

“By then, everyone will probably have assimilated the rise in mortgage rates and material prices,” said Grégoire.

The barometer noted differences even within regions. In Wallonia, Walloon Brabant (+4.2%), Hainaut (+3.2%) and Namur (+3%) are not experiencing any decline in the number of properties entering or leaving the housing market. The provinces of Luxembourg (-4.3%) and Liège (-1.1%), on the other hand, are seeing declines.

For apartments, change was limited. Nationally, the proportion of flats changing hands compared with houses remains fairly constant: 27.7% of homes purchased are apartments, rising from 27.1% in 2022.

In Brussels, 35% of homes sold were houses, compared with 65% flats, a proportion not seen in the other regions: 84% for houses and 16% for flats in Wallonia, and 72.5% for houses compared with 27.5% for flats in Flanders.

The average price of a house in 2023 was €322,780, an increase of 1.1% compared with the previous year. But when taking inflation into account (+2.1% in 2023), house price growth is negative: -1%, or more or less -€3,000 on an average property.

Compared with 2019, house price growth is +22.8% on average.

“In terms of prices, the market remains relatively stable, with a slight fall, mainly in lower-quality properties,” Grégoire said.

“We expect 2024 to be a similar year, with a slight decrease. At present, the indicators do not point to a sharp fall in prices. However, this is the second year that the price increase or stabilisation has been lower than inflation.”

At regional level, the average price of buying a house in Brussels fell in one year, from €576,576 to €562,489, a decrease of 2.4%. Over five years, the median price of a house has risen by 21% (with inflation at 16.8% over the same period).

Not surprisingly, Brussels remains the most expensive region: in Flanders, on average, it costs €358,677 (+3%) to buy a house, and €240,649 (+2%) in Wallonia.

In Flanders, Antwerp is the most expensive province with an average price of €420,129 (+4.6%), followed by Limburg (€307,935, +3.9%).

Perhaps in a reflection of rising prices demanding higher incomes from buyers, the average age of the buyer has also risen slightly over the past year, from 39.2 in 2022 to 39.5 in 2023. In Brussels, it fell from 40 to 39.9. In Wallonia, it remains stable. In Flanders, it has risen from 38.9 to 39.4 years.

The proportion of young buyers is highest in Flanders at 30.6%. In Wallonia, it was 28.7%, and in Brussels, 22.1%.

The energy efficiency of a house or flat is becoming an increasingly important factor in the property market, according to the barometer.

Every time a property is sold, an energy performance certificate (EPC) is drawn up, indicating its energy efficiency: from A+ to G.

The proportion of energy-efficient homes increased in 2023 in Flanders, Wallonia and Brussels. In Flanders, the proportion of houses and flats with an A+ to D label is the highest: 69.3%. In Wallonia, the figure was 41%, and in Brussels 32.8%.

Last year was the first time that the property index also included transfers of property as part of an inheritance. As a result, overall property activity did not fall too much, but the sharp drop in the number of sales indicates that a significant part of the buying public has experienced difficulties over in 2023.

The barometer includes properties that changed hands as part of family cases - such as gifts and marriage contracts - and as part of files managed by companies, with those figures remaining more or less stable compared with previous years.