Brussels, Belgium – The combination of soaring property prices and high interest rates has significantly impacted the property purchasing power of Belgian households in recent years, with the Brussels-Capital Region seeing a notable decline.
According to a study by real estate platform Immoweb, property purchasing power across Belgium has fallen by 16 square meters in the past two years, from an average of 121 m² in January 2022 to 105 m² in January 2024.
The decrease in purchasing power is largely attributed to three main factors. The most significant impact came from a rise in interest rates, which increased by 2.4 percentage points during this period, resulting in a loss of 24 m² of purchasable space.
Property prices also saw an average increase of 4.8%, further decreasing the amount of space available for buyers by 5 m².
While household incomes rose by 12.7% due to Belgium’s automatic wage indexation system, this increase only partially offset the loss of purchasing power, with the average gain in income resulting in an additional 13 m² of space.
The good news, however, is that as interest rates fell to 3.13% in November, purchasing power has started to recover, with an average increase of 5 m², bringing the total living space back up to 110 m².
Impact on Brussels
The effects of this purchasing power decline have been uneven across Belgium, with Brussels experiencing a relatively modest decrease compared to other regions.
The Brussels-Capital Region saw a drop of 11.5%, from 65 m² in January 2022 to 58 m² in January 2024, but recent reductions in interest rates have helped the region recover slightly, with purchasing power rising to 61 m² in November.
This recovery, although modest, highlights the direct influence of the European Central Bank’s monetary policy on the property market.
Despite the recovery, Brussels remains the most expensive region in Belgium in terms of property prices, with the average price per square meter at €3,340.
This high cost of living, combined with a relatively lower income level of around €35,000—roughly €10,000 less than other regions—means that purchasing power in Brussels continues to be the lowest in the country.
Municipal Differences within Brussels
The impact of falling purchasing power varies significantly within the Brussels-Capital Region itself. The commune of Saint-Gilles, for instance, saw a modest drop in purchasing power from 55 m² to 50 m², a decrease of just 9.7%.
However, it still recorded the lowest purchasing power in the region at 52 m² in November. In contrast, some other municipalities within Brussels have been harder hit.
Molenbeek-Saint-Jean experienced the sharpest decline, with purchasing power falling by 14.1%, from 78 m² in January 2022 to 67 m² in early 2024.
After the recent drop in interest rates, this figure rebounded slightly to 61 m². Koekelberg also recorded a significant drop in purchasing power, from 81 m² to 70 m², before recovering to 74 m² in November.
Berchem-Sainte-Agathe, despite experiencing a 13.6% drop from 91 m² to 79 m², still boasts the highest purchasing power in Brussels, with 83 m² in November.
Looking Ahead
While the decline in purchasing power is concerning, the recent recovery due to falling interest rates offers some hope for prospective buyers.
However, the stark contrast between Brussels and other Belgian regions—especially in terms of price per square meter—continues to present a challenge for those hoping to enter the housing market in the capital.
The ongoing influence of interest rates and property prices will likely continue to shape the future of property purchasing power in the region.
