Rise in property prices slowed between 2011 and 2019

According to figures from the National Bank of Belgium more new homes were built here between 2011 and 2019 than there were new families to live in them. The figures that form the basis for an article in Friday’s edition of the daily ‘De Standaard’ show that as a result of supply rising more quickly than demand the price of property rose less sharply than it had done during the first decade of the 21st century.  

Between 2011 and 2019 400,000 new homes were created in Belgium. During the same period the number of families (a single person living alone is also classed as a family) grew by 235,000. The figures for the second decade of the 21st century are very different to those for the period from 2001 to 2010. Then the number of new homes created was more or less equal to the number of new families formed.

There are currently around 5.8 homes (flats, houses, villas…) in Belgium. This figure is 600,000 more than the number of family units in the country.

But why are more houses and flats being built than there are additional people to live in them? The National Bank of Belgium says that there is a very simple explanation for this. People are investing in real estate due to low interest rates.

"People are diversifying their (investment) portfolio and, for example are investing in the property market. We see that the number of people that own more than one property has risen significantly in recent years”, the economist Geert Langenus said.

He added that this has had a surprising effect on prices. “It sounds a little strange, but without this effect the prices would have risen more quickly than is now the case. We think that it has been an important factor in slowing down the rise in (property) prices during the past ten years”.  

During 2020 prices rose more sharply again. However, the economist says that it is still too early to draw any concussions from this.

"We need to compare like with like. In 2020 the average type of house that was sold was different than it was in 2019. People bought larger houses in order to, for example have space for an office. More flats with balconies were also sold due to the various lockdown measures”. 

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