The Growing Divide: New Homes Out of reach

The dream of owning a newly built home is rapidly becoming a distant reality for a significant portion of the population. Recent data from the first quarter of 2025 reveals a concerning trend: the cost of new properties is escalating at a pace far exceeding the financial capabilities of average households. While rising interest rates are often cited as a contributing factor, deeper market dynamics are at play, creating a perfect storm of unaffordability.

Supply and Demand Imbalance Fuels Price Hikes

Analysts at Matexi and Realo point to a persistent imbalance between supply and demand as the primary driver of soaring new construction prices. This imbalance has created a long-term dynamic where prices continue to climb, regardless of short-term economic fluctuations.

Since the first quarter of 2020, prices for new apartments and new houses have increased 23.9 % and 31.3 % respectively. Household borrowing capacity increased only 9.9 % during the same period, mainly due to the increase in interest rates.
Matexi and Realo Analysis

This stark contrast highlights the growing gap between the cost of new homes and what potential buyers can realistically afford. Such as, in Brussels, the average price of a new apartment has jumped by nearly 25% in the last five years, while wages have stagnated, and borrowing power has diminished.

The VAT Burden: An Additional Hurdle

Even when relatively affordable new properties are available, such as apartments priced between €200,000 and €250,000, the 21% Value Added Tax (VAT) adds a significant financial burden, further complicating access to new homes for many households. This tax effectively prices many first-time buyers out of the market.

The Urgency of Energy Efficiency Standards

The rising cost of new construction is especially concerning in light of increasingly stringent Energy Performance of Buildings (PEB) standards. These standards, designed to improve energy efficiency and reduce carbon emissions, are becoming mandatory for existing properties, especially upon change of ownership.

In Wallonia, for instance, new owners will be required to meet minimum PEB standards by July 2026, or face mandatory renovations within five years. These standards will progressively tighten until reaching the minimum PEB in 2041. This creates a situation where older, less energy-efficient homes may become less desirable, while new, energy-efficient homes remain financially out of reach for many.

Two-Speed Market: New vs.Existing Properties

The real estate market is increasingly divided between existing properties and new construction. While prices for existing properties have stabilized in recent years, new construction costs continue to rise, exacerbating issues of financial accessibility and the availability of eco-kind housing.

The figures show once again that real estate is a two -speed market, where existing goods are distinguished and new construction. while the prices of existing goods have been stabilizing for a few years in Belgium, the prices of new construction are constantly increasing. From another point of view, this situation mainly exerts pressure on financial accessibility and on the supply of eco -friendly housing.
Fabrice Luyckx,data analyst at Realo

The Road Ahead: Addressing the Affordability Crisis

The central question remains: how will individuals and families who cannot afford new construction meet the increasingly stringent energy efficiency standards? While new homes are essential for achieving these standards,thier inaccessibility poses a significant challenge. Retrofitting existing properties, particularly apartments, can be arduous and costly, often requiring the agreement of all owners and ample financial resources.

Addressing this affordability crisis will be a major challenge for the real estate sector in the coming years.Solutions may involve government subsidies, tax incentives for energy-efficient renovations, and policies aimed at increasing the supply of affordable new housing.