Accessibility to housing is essentially economic in nature: credit regulation at the demand level must make it possible to offer affordable housing at the supply level.
“It’s true, the real estate market is under pressure here too. But the free market has fulfilled its mission. 705,000 new homes were built between 1995 and 2020. Now another 400,000 are needed by 2050. The big problem is the space available. This is the main challenge in Flanders “. In a double interview, the Flemish minister of construction, Matthias Diependaele, and his Dutch counterpart agree on one point: the solution to the housing shortage lies in the construction of new homes.
The Friday group
Through strategic analyzes and studies, the Friday Group, which brings together young Belgian talents (aged 25 to 35), wants enrich the public and political debate with new but realistic ideas. It is supported by the King Baudouin Foundation.
The real challenge is the exponential rise in prices with which we are faced. If inflation and the cost of living are taken into account, the price of real estate has doubled since 1995, a phenomenon mitigated only by the decline in interest rates.
About one in two Belgians are faced with inaccessible housing on both the rental and purchase markets, a problem that affects all socio-economic strata of society.
It’s no secret that times are tough for shoppers. The price of houses in Belgium has increased by around 8% in one year, which unfortunately makes the Belgian real estate market no different from the European market. About one in two Belgians are faced with inaccessible housing on both the rental and purchase markets, a problem that affects all socio-economic strata of society. Singles, whose incomes are more limited, can no longer buy, while low-income families can no longer afford to rent. The restructuring costs prove too heavy for the middle class, while the highest incomes flee the city (the “exodus of prosperity”).
Should we see this exponential price increase as a recent phenomenon? Everything points to yes, given the situation that prevails in our northern neighbors. Since the construction of the Amsterdam Canal Belt during the Dutch Golden Age, house prices have been closely monitored. The Dutch economist Piet Eichholtza was thus able to design the “Herengracht index”, which, after correcting the inflation, allows us to follow the fluctuations in house prices in Amsterdam over the centuries. Now it turns out that the 1973 prices don’t differ that much from the 1628 ones. Since 1990, however, these fluctuations have completely disappeared to make way for a surge in prices.. This, with a small correction around the 2008-2012 housing crisis, continues today, with the average price now five times higher than in previous centuries.
Limit the mortgage supply
On the other hand, banks prefer “safe” mortgages to corporate loans, as rising land prices better cover the risk.
Western governments knowingly limited the number of bank loans in the 1930s and 1970s to preserve the affordability of housing.
In his book “Why Can’t You Afford a Home?” Economist Josh Ryan-Collins explains that Western governments knowingly limited the number of bank loans in the 1930s and 1970s in order to preserve the affordability of housing. .
Since 1990, however, this lending discipline has been systematically abandoned in favor of the free construction market., supply and demand are responsible for regulating accessibility to housing. Result? Mortgages have been on the rise since 1995: the increase in property prices implies that of mortgages, which in turn leads to an increase in property prices… and therefore loans.
At present, mortgage loans also represent a fundamental and increasingly important part of the loan portfolio in Belgium. They seem to usher in a 21st century in which rising property prices would be financed by rising debt. Economic growth is stagnant and property prices are growing exponentially, with as a corollary a particularly complicated balancing act for the population, the increase in social inequalities and the vulnerability of our economy to housing bubbles, as we saw in 2008. Have we learned enough from this crisis? Shouldn’t we think for a moment about how we financed housing over the past century?
In any case, accessibility to housing is not a question of pressure or lack of space, it is essentially of an economic nature: the regulation of credit at the level of demand must make it possible to offer affordable housing at the level of supply.
Of Stefania Dens, engineer-architect and urban planner. She is a researcher at the Design Sciences Hubet at the Faculty of Design Sciences of the University of Antwerp, she is also a member of the Friday Group.
Of Erik Vandenpoel, engineer-architect. He collaborates with the Bogdan & Van Broeck architecture firm, for which he participated in Bijgaardehof, the largest cohousing project in Belgium.