In Belgium, the housing market remained stable in recent years. This was due to Belgium's fiscal system. When purchasing a house in Belgium, consumers pay the asking price plus ten (in Flanders) or 12 percent (in Wallonia and the Brussels capital region) in registration rights. This makes buying a house in Belgium a long-term investment. Of the three regions, Flanders is the largest when it comes to real estate activity with over 60 percent of all transactions happening in the Dutch-speaking part of the country. In 2016, the average price of a house was 237,000 euros. Between the first quarter of 2015 and the first quarter of 2017, the house price index in Belgium increased from 143 to 149, while the indices of Luxembourg and the Netherlands increased from 132 to 153 and 92 to 103 respectively in the same period with the number of real estate transactions decreasing from 68,111 in 2006 to 59,786 in 2016.
In Luxembourg, the housing sector is currently at risk of overheating. This has two reasons. First, the household debt ratio is high with the private debt of Luxembourg reaching 410 percent of its GDP in the third quarter of 2016. At the same time, the average private debt in the European Union was 162 percent. Second, the strong demand for housing in the Grand Duchy is leading to an overvaluation of real estate assets in the country. In 2016, approximately 90 percent of respondents from Luxembourg believed housing prices were expensive, compared to approximately 50 percent of respondents from the Netherlands.
In the Netherlands, the residential property market has continued to grow due to low mortgage rates, a recovering economy and a high level of consumer confidence. For example, the number of registered transactions reached 215,000 in 2016 and the average selling price of houses was higher than in 2013, when prices reached a low point. In 2017, real estate prices are expected to increase with five percent as a high number of sales, combined with an increasingly scarce supply, are expected to push housing prices up. In the four largest cities especially, the demand of housing outweighs the supply. In December 2016, the average number of houses for sale in the municipality of Amsterdam was approximately 1,800, with this number reaching an average of 4,300 in December 2014. The housing market in large Dutch cities is showing signs of overheating, but is no credit-driven bubble yet. This is party due to people increasingly using their own funds to buy property.
Like the rest of Europe, the construction sector in the Benelux struggles to keep up with the high demand. The total number of building permits issued for new houses in Belgium in 2016, for example, was 8,000 permits less than in 2006. Indeed, the confidence indicator of the construction sector in Belgium was more negative in August 2017 than its European counterpart. One of the main issues for the Benelux countries in coming years will be to create an incentive for local authorities or housing associations to increase the supply of accommodation.