Housing lags behind demographic growth

Only 44,114 permits for new homes were issued last year, figures released by the federal public service for Economy show. The 30,214 of these permits that were issued in Flanders mark the lowest number for the region since 2002, dropping gradually from 61,083 during its peak in 2006. This is primarily due to the lapse of temporary support measures such as a reduced VAT rate on the first instalment of 50,000 early in 2011. Therefore a number of families brought forward their building plans to 2010, causing a recovery in the construction of new homes. Similarly, the number of building permits for renovations dropped by 6% to 27,144 last year, also the lowest level since 2001. Never before has the shortage and high price of building land led to so many old homes being completely demolished to make way for a new building.Population figures for 2010 were also released yesterday. At the end of 2010 there were 10.951,266 Belgians, reflecting a growth of 1% or 111,361 during the year under review. At an average of 2.3 people per home, an additional 48,400 will be needed. At first glance that translates as a permit shortage of approximately 10%, but on closer inspection this transpires as a gross underestimation if one considers that the number of single-parent families and senior citizens who remain at home for longer cause residential density to drop. The weekly The Economist has come up with solid arguments that house prices in Belgium are 65% overpriced compared to rentals and too expensive in view of purchasing power. The fact that too few new homes have been built for some years now will do little to encourage a drop in prices in the short term. The situation is even worse in large cities, especially in the Brussels Region. If one considers that the population grew by 2.7% in one year, a residential density of 2.3% would call for 12,800 additional homes, when in fact only 2,193 building permits were issued during the past year. The population growth is largely due to migration; not the population group with biggest buying power. There are more and more indications and studies that show that even the average, well-off Belgian can no longer afford a new home. Addressing the issue of affordable housing will therefore undoubtedly play a pivotal role during the next elections. Social housing only constitutes one part of the solution, as only 7% of all housing and 24% of all rental housing make up social housing. At the end of 2010, Flanders counted 143,000 social homes and a waiting list of 81,000 families. The 2,200 additional homes built each year are insufficient. The Brussels Region has 39,076 social homes and a waiting list of 38,000 households.