2015-2017 residential market observatory

For over 10 years now, IDEA Consult has been analysing the issues in the residential market, and has been doing so on two levels. In particular, we regularly receive requests from local, metropolitan and regional authorities to clarify the dynamics of the local residential market. Our clients include the Ministry of the Brussels-Capital Region, Lille-Métropole, the Poitou-Charentes region and several Belgian cities.

In 2018-2019, IDEA Consult updated the Sales observatory for the fourth time. This time, our mission was part of a larger study analysing various aspects of residential property. The study consists of three parts. The latter two were carried out in cooperation with the Antea Group:

1. 2015-2017 residential property sales observatory
2. Geographical analysis of owner-occupied residences
3. Property grants and allowances

The main conclusions from the updated 2015-2017 residential property sales observatory can be summarised as follows:

1. In demographic terms, there is a cautious “overflow” of growth towards the “second-ring” neighbourhoods and the periphery. This growth dynamic is mainly endogenous and international. The rejuvenation of Brussels seems to have hit a turning point, with an increase in the average age.
2. In terms of the housing offer, the number of residences in the region seems to be growing steadily, with only a few municipalities experiencing a shortage of additional housing. The trend to apartment living is extending further, beyond the regional boundary in fact. The second-ring neighbourhoods are increasingly sought-after on the new-build market, although the latter does however seem to be decelerating.
3. The number of real estate transactions is still trending downward in the Brussels region overall, although a recovery seems to be underway since 2017. Currently the market for single-family houses continues to be a niche market, with apartments accounting for over 3/4 of all sales. Surprisingly enough, the municipalities with a proportionally higher number of transactions also have a proportionately higher number of owners-occupants, meaning rental properties are resold less often than people’s own homes.
4. As far as prices are concerned, there is once again an increase, especially for single-family houses. Only a few manage to escape this. The pressure is the greatest in the least expensive segments. On the geographical level, the expensive quadrant, which extends from the south-east to the north-east, seems to be expanding. The west of the region is still the most affordable area for housing.
5.  In terms of accessibility, the price hike contrasts with the further decline in income in some parts of the Region. In particular, houses are still excessively expensive in the majority of the Brussels-Capital Region, compared with houses in the periphery and in other large Belgian cities.
6. As far as the poles of development are concerned, we observed that some of them are starting to see a positive dynamic on the revenue level, which is reflected in the evolution of apartment prices at least.

The second part of the study proved equally informative. Notably, it confirmed that 40% of all properties in the Brussels-Capital Region are occupied by their owners. This figure is trending downward however, except in the more affordable neighbourhoods in the west and north of the Region. The parameters in favour of a larger share of owner-occupants are a higher average age, a lower average population density, a higher income level and a lower percentage of foreigners (the income level has more of an impact than this parameter). On the geographical level, this means that the number of owner-occupants is substantially higher in the second-ring neighbourhoods as a result. In the centre of the Region and in the neighbourhoods adjoining the first-ring neighbourhoods, by contrast, the housing market is much more geared towards rentals.

Finally, the third part of the study aimed to evaluate the impact of housing grants and allowances on home ownership such as the housing credits of the Housing Fund (Fonds du Logement/Woningfonds), the CityDev housing projects and the CLTB housing projects. Their impact is mainly felt in the west of the Brussels-Capital Region, where real estate is more affordable.