Property prices rose in first half, despite lockdown

Property prices rose in first half, despite lockdown

The lockdown due to the coronavirus outbreak in March saw house and apartment sales fall by almost 30% in March, April and May, compared to the number of transactions in the same period last year.

During the lockdown, potential buyers were unable to visit properties, and even estate agents were unable to visit to arrange publicity for a sale.

That effect is to be expected. However less predictable is the fact that prices in June were up 8.4% compared to the month of June last year, despite the number of properties unsold over the three preceding months.

The average price for a house at the moment is €267,040, which is 1.9% higher than the average for 2019, or €5,000 in cash terms.

For an apartment, the difference is greater: an average price now of €242,024, an increase of 5.9%, or €14,000 more – the biggest increase in five years.

The increase is nationwide: 5.8% in Flanders to an average of €245,851, 6% in Brussels (€268,923) and 6.2% in Wallonia (€188,840).

Back in April, ING bank published a study that noted the fall in sales, as well as a drop of 50% in visits to property websites, but predicted prices would go down when the market opened up again.

“We expect a price drop of around 2 percent for the whole of 2020,” ING economist Steven Trypsteen told the VRT at the time.

And now, despite reports that more buyers are looking for a house with a garden – almost certainly a post-lockdown reaction – it turns out that apartments are doing better.

This is because there is more demand for apartments,” said Bart Van Opstal, spokesperson for the federation of notaries.

“That trend had already started at the beginning of the year, but has clearly continued during the corona crisis. We also see that the more expensive apartments, especially new-builds, are on the rise. This explains why apartment prices are rising faster than those of houses.”

The phenomenon could however be temporary, as the after-effects of the epidemic continue to make themselves felt.

It is not clear whether the increasing number of transactions in June is a temporary catch-up or a sustainable revival,” said Van Opstal.

“If unemployment increases in the coming months, there is a good chance that less real estate will be bought and sold. And the evolution of interest rates will also affect transactions and prices.”

Alan Hope
The Brussels Times

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