Belgian online real estate leader, Immoweb, has confirmed that the market will land in the first quarter of 2023. According to Immoweb, the average price for a square meter of property on Belgian territory is currently €2,265, which represents a quarterly increase of around 0.9%, corresponding to half the increase seen in the first quarters of the previous two years. This slowdown in growth is due to the financial crisis and the significant decrease in mortgage lending. In February 2023, Belgian banks granted 49% fewer mortgage loans than in the same month the previous year. Immoweb also notes that the Royal Federation of Belgian Notaries recorded a 10.5% decrease in real estate transactions in January and February 2023 compared to the same period in 2022. However, although there has been a slight decline in real estate prices, the market is still continuing its upward movement.
Not all regions of the country have been impacted equally by the evolution of the market. Brussels-Capital is currently seeing the least strong growth, unlike Wallonia and Flanders, where the average price of real estate increased by 0.9% during the first quarter of 2023. Furthermore, the attraction for the countryside is decreasing, and the buyers’ propensity to turn mainly to houses is becoming more apparent. The price of goods in Luxembourg is sharply increasing, while Walloon Brabant recorded a much more modest increase. Finally, the rise in interest rates has rebalanced the balance of power between sellers and buyers in favor of the latter, making it the right time for potential buyers to negotiate the price of real estate.
“The landing of the market is confirmed in the first quarter of 2023”: here is how Immoweb, the Belgian leader in online real estate, analyzes the evolution of the market over the last three months.
According to Immoweb, a square meter is now trading for 2,265 euros on Belgian territory. Which, although it is a quarterly increase of around 0.9%, corresponds to “an increase half that of the first quarters of the two previous years”. Two years that had experienced growth equal to 1.9%.
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Much weaker today than it was during the confinement, market growth is slowed by the financial crisis and a sharp decline in the granting of mortgages. “In February 2023, Belgian banks granted 49% less mortgage loans compared to the same month of the previous year”, specifies Immoweb, which adds that the Royal Federation of Belgian Notaries recorded a decrease of 10.5% real estate transactions in January and February 2023 compared to the same period in 2022.
“We are now witnessing a slight slump in real estate prices in a market that is still continuing its upward movement,” notes the real estate site. “The collapse announced by some experts is therefore still not on the agenda, with displayed prices remaining positive in the first quarter. ”
Still, not all regions of the country are impacted in the same way by the evolution of the market…
The real estate market progresses less in Brussels
Thus, Brussels-Capital is the region of the country where growth is the least strong. Unlike Wallonia and Flanders, where the average price of real estate increased by 0.9% during the 1st quarter of 2023, houses and apartments took “only” 0.7% in value between January and March.
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“Overall, Brussels still lags behind the other two regions. A phenomenon that we had observed following the arrival of the Covid and which has reappeared since the start of the rise in rates which occurred last year. In one year, real estate prices have indeed increased by +3.6% and +3.5% respectively in Flanders and Wallonia, once morest a more timorous increase in Brussels (+2.6%)”, emphasizes Immoweb. “However, with an average level of €3,326/m², prices in the Brussels-Capital Region remain well above those of Flanders (€2,385/m²) and Wallonia (€1,709/m² ). »
Less countryside and fewer houses
Other observations: the attraction for the countryside – which was very strong during the confinement – is decreasing at the same time as the propensity of buyers to turn mainly to houses.
“After the real boom in house prices during the health crisis, apartments had recently taken over”, assures Immoweb, which lists a 1% increase in apartment prices once morest 0.9% during the 1st quarter of 2023. “But once once more, Brussels is the exception to the rule. While the price of apartments increased by +1.4% in Q1 in the capital, that of houses saw a slight drop (-0.2%). A significant difference, which might be explained by the high interest rates which make it more difficult to finance major projects, such as the purchase of a house, in our capital. ”
Luxembourg: the price of goods up sharply
At provincial level, one Walloon province stands out: Luxembourg. Even more than Liège, and its growth equal to 1.2%, the green province has seen the price of its real estate increase by 1.4% since January 2023. This makes it the 3rd province in the country to have taken the most value since the beginning of the year. Conversely, Walloon Brabant (+0.3%) recorded a much more modest increase. Only Antwerp (+0.2%) does less well.
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And “if we look at the big Belgian cities, Louvain (+2%) and Namur (+1.8%) lead the way. In the other part of the table, Mons recorded a slight drop of -0.3%, while Antwerp experienced a status quo (+0%). ”
A more balanced balance of power
For Immoweb, “the sharp rise in rates seems to have rebalanced the balance of power between sellers and buyers in favor of the latter”. And “given the mechanical drop in demand (impacted by the rise in interest rates, editor’s note), potential buyers should therefore no longer hesitate to negotiate the price of goods”.
As the Belgian real estate market continues its upward movement, Immoweb’s latest analysis highlights a slower growth rate over the last three months. Despite a quarterly increase of around 0.9%, the growth rate is less than that experienced in the first quarters of the two previous years. The financial crisis and a sharp decline in granting mortgages have resulted in a much weaker market compared to the confinement period. However, the real estate prices remain positive, and the collapse announced by some experts is still not on the agenda. The article sheds light on how different regions in Belgium have been impacted differently by the evolution of the market. Overall, the sharp rise in rates seems to have rebalanced the balance of power between sellers and buyers. As potential buyers can no longer hesitate to negotiate the price of goods, the landing of the market is confirmed in the first quarter of 2023.
