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Living in Brussels cheaper than in other major cities around the world

Last week, in a study of the international property market, The Economist concluded that living in Brussels is considerably cheaper than in other major cities around the world, because our taxes are higher. It states that a 2-bedroomed apartment of approximately 100 square meters in one of the smarter areas of Brussels is cheaper than a similar pied-à-terre in a comparable neighbourhood in thirteen other major cities.

Research shows, according to The Economist, that the reason why Brussels scores so well, is the high costs related to the purchase of a property in our country.

Apart from Brussels, The Economist also studied the price evolution of apartments and houses in New York, Tokyo, London, Milan, Paris, Sydney, Dublin, Madrid, Frankfurt, Amsterdam, Stockholm and Toronto. The magazine compared property prices from 1980 with those from late 2001.

As could be expected, the British magazine found a substantial price increase. Spain, Ireland and Great Britain crowned the list with 124, 95 and 89 percent respectively. In Belgium house prices rose by 23 percent, in the United States by 20 percent and in The Netherlands by 66 percent. Only Germany does not follow the general trend. There, property prices fell by 21 percent on average. The evolution on the German property market can easily be explained. It is probably largely due to the German unification in 1990.

By and large, apartments are most expensive in New York, Tokyo and London, where a humble abode of a mere 100 square meters with two bedrooms in one of the better boroughs easily fetches more than 900,000 euro. They are followed by Milan, Paris, Sydney, Dublin, Madrid, Frankfurt, Amsterdam, Stockholm, Toronto and, completely at the bottom of the list, Brussels with prices around 200,000 euro.

According to the British publication, property is relatively cheap in Belgium because registration fees, mortgage costs, notary public’s fees and real estate agent’s commissions take up approximately one fifth of the purchase price.

The Economist studied the evolution in house prices, because the steady rise of those prices would, in its opinion, have guarded the world economy from economic crises. For most of us, our house is our prize possession. If its value increases, we continue to consume, even in times of depression – when production and equity market prices fall.

If the crisis deteriorates to the extent that it causes property prices to drop, at some critical point in time consumer confidence is very likely to fade and recession is not far off. One remarkable aspect of the crisis that struck the world economy in the last two years is the persistently strong consumer confidence.

Reported by
10 April 2002

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