House price index – 4th quarter of 2023

House price index - 4th quarter of 2023

Housing

25 March 2024

• The observed annual inflation rate for house prices amounts to 3.4% in the fourth quarter of 2023, which is an increase compared to the rate of 0.9% observed in the previous quarter.
• The average inflation rate amounts to 2.5% in 2023
• The house price index went up by 2.2% in the fourth quarter of 2023 compared to the previous quarter.
• STATBEL publishes for the first time detailed house price indices per region for existing houses.
• The indices have been completely reviewed since 2005.

Each quarter, STATBEL, the Belgian statistical office, calculates a house price index according to European regulations.

The annual inflation rate for house prices amounts to 3.4% in the fourth quarter of 2023, which is an increase compared to the rate of 0.9% observed in the previous quarter. The average inflation rate amounts to 2.5% in 2023. The house price index stands at 139.08 points (2015=100) against 136.15 points in the previous quarter and increased by 2.2% compared to the third quarter of 2023.

The European Union Member States calculate the house price index according to a harmonised methodology which makes it possible to compare the evolution of house prices across the different Member States. The house price index measures the price evolution of private real estate. The index follows price changes of new or existing residential real estate purchased by households, irrespective of their purpose (letting or owner-occupying). The house price index measures the price evolution with the assumption that the characteristics of the property sold remain unchanged.
The index thus measures the actual price evolution without interference of qualitative changes using a hedonic model (see technical information). If the size of the property sold increases, the average price of houses sold will also increase, which does not necessarily mean that the house price index will have increased. Therefore, this index does not measure the evolution of the average sales price of real estate.

The house price index is based on real estate transaction data from the General Administration of the Patrimonial Documentation of the FPS Finances. The results for the latest quarters are considered provisional and may be reviewed during the following quarter when additional data become available.

House price index for new houses and existing dwellings

The house price index can be broken down by two items (new dwellings and existing dwellings). In the fourth quarter of 2023, annual inflation amounted to 4.8% for new dwellings and 3.0% for existing dwellings. The weights of these two items in the overall index amount to 18.6 % and 81.4 % respectively for the year 2023.

House price index of existing houses per region

House price index for existing houses is broken down per region since 2010. In the fourth quarter of 2023, inflation for existing houses amounted to 1.4% in Brussels, 3.5% in Flanders and 2.3% in Wallonia.

Comparison of previous and new results

The chart below shows the comparison between inflation rates calculated based on previous and new indices. Most of the time, the difference is limited. The average difference in absolute value between inflation rates calculated based on both calculation methods amounts to 0.3 point of percentage. The highest difference is observed in the fourth quarter of 2010 (1.4 points of percentage).

The differences between the old and the new series can be explained by difference in the hedonics model and by another aggregation procedure. Previously, the indices were directly compiled at the Belgian level. Now, the global index at the Belgium level is derived from regional indices having fixed weights on yearly basis.

Comparison with neighbouring countries

Since Eurostat will only publish the neighbouring countries' house price index for the fourth quarter of 2023 on 04 April 2024, the third quarter of 2023 is the most recent quarter to use as a basis for comparison. In Belgium, inflation stood at 0.9% in the third quarter of 2023 compared to 1.9% in the second quarter of 2023. The Netherlands experienced an inflation rate of -3.8% in the third quarter of 2023, an increase compared to the -4.3% inflation rate observed in the first quarter of 2023. France experienced an inflation rate of -1.5% in the third quarter of 2023, a decrease compared to the 0.7% inflation rate registered in the second quarter of 2023. In Germany, inflation stood at -10.2% in the third quarter of 2023, a slight decrease compared to the rate of -9.6% registered in the previous quarter. Inflation for the euro area as a whole has slightly decreased to -1.0% in the third quarter of 2023 compared to -0.9% in the previous quarter.