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BFW digitaal 2023/03

  • De Belgische woningmarkt: trends en recent verloop

    Woensdag 22/3/2023
    Peter Reusens

    After several years of strongly rising prices, the Belgian housing market cooled in 2022. The indicators for the second half of the year pointed to a decline in the number of transactions and zero growth in house prices. That being said, a sharp decline in house prices currently appears unlikely. This is because the negative impact of higher interest rates is being offset by an array of factors, including the longer terms of new mortgage loans, higher down payments, rising nominal incomes, falling energy prices and a slowdown in housing supply growth. Finally, the repayment burden for new mortgage loans has risen strongly in recent years but declined markedly for existing fixed-rate mortgages thanks to strong income growth.

  • Tegenwind steekt op voor de Belgische woningmarkt

    Woensdag 22/3/2023
    Johan Van Gompel

    The Belgian housing market continued to perform well in recent years despite successive crises. Nevertheless, a weakening of buying and construction activity has been noticeable in recent quarters. This takes place against the backdrop of rising interest rates and is accompanied by lower annual house price growth dynamics. Together with strong nominal income growth among households (a consequence of high inflation, automatic indexation, and robust job creation), the less exuberant house price dynamics put downward pressure on the overvaluation of the Belgian housing market. This was offset by upward pressure due to the rise in interest rates. On balance, the overvaluation, approached from an econometric model, remained between roughly 10-15%. The household debt ratio continued to rise in recent years, although that trend seems to have reversed recently. The headwinds in the housing market will likely result in a further deceleration in the nominal price growth rate in 2023-2024. Given still relatively high general inflation, that implies a house price decline in real terms.

  • Assessing the impact of two Belgian specificities on competitiveness and purchasing power when an energy shock hits

    Woensdag 22/3/2023
    Charles de Beauffort / Gregory de Walque / Thomas Lejeune

    When facing strong and persistent imported energy price shock, the Belgian economy is weakened by two structural features. First, the transmission of wholesale energy prices to the consumer is quicker and stronger than in the rest of the euro area, as measured by the energy subcomponent of the HICP. Second, Belgium is one of the three small economies of the euro area indexing automatically wages to price inflation. The latter characteristic is supposed to shield (at least partially) workers from the more pronounced loss in purchasing power induced by the first one. However, this is at the cost of a loss of competitiveness. We propose to disentangle the respective effects of each of these Belgian particularities by using a macroeconomic modelling of the Belgian economy within the euro area and proceeding to counterfactual analysis.

  • Betalen met een digitale euro: hebben wij daar nood aan?

    Woensdag 22/3/2023
    Prof. dr. Selien De Schryder / Prof. dr. Frank Smets / Prof. dr. Rudi Vander Vennet

    The European Central Bank is currently examining the potential usefulness of a digital euro for households and companies and will communicate in October 2023 whether such digital currency will be launched and, if yes, in which form. Next to establishing a permanent access to public money in a more digital world, the digital euro can contribute to a streamlining of existing private digital currencies and payment systems, a more resilient digital payment system, and the preservation of monetary independence. The digital euro can, however, negatively impact the banking system if bank deposits get substituted by digital euro holdings. Research shows that this substitutability leads to an expected decline in profitability of banks which rely relatively much on bank deposits as their funding source. This negative effect can, however, be attenuated by limiting the quantity of digital euros. Moreover, an adequate determination of the supply of digital euros can limit the negative consequences on the banking sector to such extent that the introduction of a digital euro can offer welfare gains.