The affordability index of De Tijd shows to what extent an average income is sufficient to buy real estate. We compare the average income per municipality and per year against the median price of houses and apartments.
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We correct by taking into account three assumptions:
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1. the property is financed with a mortgage loan with a term of 20 years at a fixed interest rate (annual average of interest rates for long-term credit).
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2. the own contribution amounts to 15 percent of the median price of the real estate price.
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3. the repayment may not exceed one third of the average income. Negative values up to and including 0 indicate affordability, values above 0 increasingly indicate unaffordability. The higher the index, the higher the percentage that people have to pay out of the average wage to buy real estate.
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