Who else can afford a big place to live?

The purchasing power of real estate in Belgium has decreased by 25 square meters in a year. This means that for the same amount of money a Belgian can only buy a smaller building. And it's not just a little! Almost a quarter of the living space is disappearing. The purchasing power of real estate has fallen from 114 square meters in January 2022 to 89 square meters now for a couple without children with median income.

This trend of declining real estate purchasing power is being felt across Europe, according to data provided by Immoweb, although it is not as pronounced in Belgium.

In France and Italy, 17 square meters were lost, in Spain 22 square meters and in Germany 11 square meters. This development is explained''primarily by rising interest rates (4% on average), which has led to a strong decline in the ability of households to borrow by 15-30% across countries.

Since banks are also applying stricter criteria, the number of loans has fallen sharply. In Belgium, for example, it fell by 27% between July 2022 and July 2023. Households are forced to buy modest homes or wait for better times altogether before investing in real estate.

Till then, thanks to the relatively high purchasing power of Belgian households compared to our neighbors, Belgium has the largest area of "purchasable" housing.

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The pressure on real estate prices is also less than in other countries. While in France, Germany and Luxembourg (where''real estate is very expensive) there is a downward trend in prices, while in Belgium prices continue to rise (by an average of 2.9% per year, reaching 2,300 euros per square meter), as well as in Spain or Portugal, where growth has been staggering in recent years. The Portuguese government's policy encouraging foreigners to buy property in the country has led to a 78% increase in prices between 2017 and 2022, while local wages have only increased by 24.8%. It has become impossible to afford housing. The benefits of tax breaks given to foreigners have been eliminated, but prices remain high and the purchasing power of real estate is at its lowest (only 28 square meters). In Germany and Luxembourg, price reductions are most noticeable in 2023, these are the two countries where prices''have soared over the past six years.

These trends can be seen in European capitals, where Brussels has the best real estate purchasing power with 62 square meters.

The price of housing there remains reasonable in the European capital, which seems little attractive, with a price of 3322 euros per square meter compared to 9857 euros in Paris or 5007 euros in Berlin, which is far from being the most expensive city in Germany.

The year-on-year increase in house prices in the Brussels region (+1.2%) was less than in Flanders (3.3%) or Wallonia (2.7%). There is also a slowdown in Antwerp, where growth has been strongest in the last six years. Liège is one of the few Belgian cities where prices have even fallen in recent months.

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