The Belgian housing market eased through the worldwide economic crises with only modest downward adjustments. This, coupled with ongoing attractive mortgage interest rates, affirms the view today that
investing in property is a good financial decision for Belgians. Challenges do exist for buyers however, particularly since recent bank policies impose more rigorous qualifying terms. New requirements make
it difficult for some buyers to obtain a loan since a higher personal income base is needed to qualify for a purchase, among other tightened restrictions.
It is said that Belgians are born ‘with a brick in the stomach’ and buying property is a long tradition in many families for generations: Parents support (sometimes even financially) their children to invest in
property to avoid rent payments and as a long-term, secure investment.
Other factors enhancing a positive view of the real estate market are: a stable and growing private rental sector, views that buying a property is a better alternative to meager rates offered on saving accounts, the wish to avoid the risk and volatility of the stock market and the reality of a continuous fiscal friendly climate.
Recent regionalization of housing fiscal policy has not lessened the financial advantages offered by the government, though it has restricted the number of people with to access benefits. The impact of these changes is somewhat compensated by on-going low interest rates.
In addition, real estate transactions have become more complex. Buyers and sellers are faced with many obligations such as soil attestations, energy check-ups, insulation rules, flooding risk assessments, etc. This is certainly an opportunity for professional real estate agencies to increase their market share since brokers are able to apply their expertise on these subjects and bring added value to the customer.
Overall, 2014 showed an exceptional high volume of property sales because people anticipated the 01/01/2015 legislation change of the fiscal treatment for house loans.
Price evolution for 2015 is expected to be slightly lower than 2014 for the mid-range residential real estate market. Price evolution in the coming years for median priced homes is expected to be stable (1% to 3% range) or with a potential moderate increase (+5%) since inflation is not expected to substantially increase. Investing in Belgian real estate is therefore with very limited risk. Upscale properties tend to be more vulnerable to price shifts and remain difficult to sell in today’s environment. Sellers are in general not yet convinced of the decreased or stabilized value of their property and speculate a revival of the market in order to avoid loss on their investment.
The Belgium market is likely to resist any noteworthy rate increases due to the high solvability of the average Belgian consumer, given their high savings rates and low debt. Though politicians today are
discussing tax increases for housing, first properties will most likely not be affected since there is already a substantial tax impact on these transactions. Income from second properties however may be
exposed to increased taxes in the future.
Finally the housing rental market is growing. Factors influencing this trend include new bank policy which impedes or delays potential first-time homeowners from securing loans, and secondly the lack of financial resources of those who simply cannot buy.