Belgian house prices unaffected by Dutch slide

A report by German landesbank Helaba predicts that, while Belgian house prices risen over the past years and may see only minor corrections this year, those in The Netherlands will continue to slide, reports Property Investor Europe. Weak economies are projected for both markets but The Netherlands is bogged down by high private household indebtedness and mortgages. “Compared to the rest of Europe, The Netherlands is currently one of the difficult countries, while the background conditions in Belgium are much more favourable,” says Helaba in its latest Real Estate Report. Prices in Belgium rose by 1.2% last year, above the European average, while Dutch prices slid by a pretty steep 6%. The boom in Dutch housing ended in 2008, and since then prices have dropped by between 16% and 20%, and are back at the levels of a decade ago. Helaba doesn’t believe the downtrend will slow. “The Dutch housing market displays a number of characteristics that in other countries, in the recent past, often coincided with the emergence and eventual bursting of a real estate bubble,” it said.

Belgian housing has seen an impressive rally over the past 20 years but lending, and thus private household indebtedness, remained moderate. But Helaba said: “We see risks in the high price level that has been reached in the Belgian housing market. Key metrics of affordability make Belgian residential real estate seem expensive while comparable numbers for the Netherlands have improved noticeably as a result of the correction that has already taken place in that country.” In the latter it sees falls of at least another 5% in 2013 before the market stabilises.