House price index – 4th quarter of 2023
- 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.
House price indexes, inflation last 2 years
Access to latest statisticsHouse price indexes, weight, last 8 years
The table below shows the weights of the components of the house price index (purchases of new dwellings and purchases of existing dwellings). The weight for purchases of new dwellings is based on the gross fixed capital formation in housings. The weight for purchases of existing dwellings corresponds to the total value of residential property transactions by households on the secondary market for existing dwellings.
Technical information
The house price index measures the price evolution of real estate prices on the market of private property. The index follows price changes of new or existing residential real estate purchased by households, irrespective of their purpose (letting or owner-occupying). Only market prices are taken into account. Houses built by their owners are therefore not included. The price of the building plot is included in the house price.
The house price index is based on real estate transaction data from the General Administration of the Patrimonial Documentation of the FPS Finances. The prices used are those included in the deeds of sale. Given the time between the date on which the preliminary sales agreement is signed and the date on which the deed is executed (between three and four months), this index measures the price evolution with a delay compared to the actual date on which the sales price is set. This delay is inherent to the data source.
The house price index is calculated by the European Union Member States, Norway and Iceland. Eurostat calculates the index for the Euro area (as well as for the European Union as a whole) using the harmonised indices of the Member States. Given the role of the housing market in the economic and financial crisis of 2008, the house price index was included in the indicators used in the procedure for macroeconomic imbalances procedure of the European Union.
The house price index is calculated under the European Regulation 2016/792 on harmonised indices of consumer prices and the house price index and 2023/1470 laying down the methodological and technical specifications as regards the house price index and the owner-occupied housing price index. Data are available from 2005 onward for Belgium as well as for the European Union and the majority of European countries.
The house price index can be broken down by new houses and existing houses. The weights of these two items in the overall index are determined by the gross fixed capital formation in houses (for the new houses) and the total value of transactions of the previous year (for the existing houses). Until 2013, the house price index of new houses was roughly estimated based on the output price index in the construction sector. Since 2014, it is also based on real estate transaction data. House price index for existing houses is available per region since 2010. Therefore, data were completely reviewed for the publication of results in the 4th quarter of 2023 in 2024.
Since the houses that are put up for sale differ from one quarter to another, the changes in characteristics are processed with hedonic regression models to eliminate price fluctuations due to changes in characteristics of the properties sold. These models aim to estimate the theoretical price based on the characteristics and location of the houses sold. This theoretical price is then compared to the actual price. Two indices are calculated, one with the actually observed transaction prices and the other with the prices estimated by the regression models. The final index is obtained by calculating the ratio of the index obtained with the actual transaction prices compared to the index obtained with the estimated prices. Therefore, the house price index may be evolving differently from the observed average prices.