What does the future hold for property investment in Belgium?

What does the future hold for property investment? Last September, Trends-Tendances examined the outlook for the Belgian property market.
To contribute to the debate, they called upon a panel of experts: Gaétan Clermont, Etienne de Callataÿ (Orcadia Asset Management), Guido de Crombrugghe, Sébastien Verstraete (Director of Residential Investment Properties at CBRE), Bernard Kepenne, Eric Verlinden (CEO of Trevi), Frédéric Sohet (Deloitte), Robert de Mûelenaere (Managing Director of the Construction Confederation), Julien Manceaux (economist at ING), Pierre-Alain Franck (IPSI).
Here are the ten questions and answers that emerged:

What are the alternatives to property?

Sébastien Verstraete points out that the Belgian property market is a stable investment, as it “provides returns 35 to 45 times higher than money deposited in a bank savings account”.
The economists in the group believe that investing in shares offers a higher return, but they acknowledge that such an approach is more volatile.

What is currently the best residential property investment?

The answer is unanimous: a small flat in need of renovation in a city. This is considered a sound investment, with a gross return of 4 to 4.5%.
Important factors to take into account are future environmental standards and location. It may also be worth considering overlooked sectors such as logistics and care homes.

What is the worst investment?

Robert de Mûelenaere explains that a poor investment is “a property that has been incorrectly valued, is poorly located and has a low energy performance”.
To summarise their comments, the worst investments are properties that do not meet the requirements of the forthcoming environmental transition, a detached villa costing more than €500,000, homes poorly served by public transport, and large flats.

Where should you invest?

The obvious answer: in cities. In Belgium, Brussels, Antwerp and Ghent are in the spotlight.
According to Robert de Mûelenaere, it is worth investing “in any region where demand exceeds supply and where demand is set to increase further. Neighbourhoods that are at the beginning of a regeneration process are also interesting prospects”. What does the future hold for property investment in Belgium? We explain everything in detail.

What return can be expected today?

For a new-build flat in a city, the gross rental yield will range from 3 to 3.75%.
An investor in a renovated city flat will achieve a return of 4 to 4.5%.
The return ranges from 5% to 6.5% for shared accommodation in Brussels

Is the decline in the number of homeowners a good opportunity?

According to our experts, this is actually simply a return to the previous situation. Julien Manceaux points out that the increase in homeownership was a purely political choice encouraged by the housing bonus. With these policies being revised and new environmental standards on the way, the decline in the number of homeowners marks a return to normal.
However, Pierre-Alain Franck hopes that major investors will not gain a monopoly over the market, as this would lead to rent inflation.

How will property prices change over the coming months?

Here are the Trévi and ING groups' forecasts for price increases in 2019

Trévi
Flanders: Flat: 3% – House: 3%
Brussels: Flat: 5% – House: 6%
Wallonia: Flat: 3% – House: 4%

ING:
Flanders: Flat: 4% – House: 4%
Brussels: Flat: 5% – House: 5%
Wallonia: Flat: 3% – House: 3%

Mortgage rates at an all-time low: will this continue for long?

According to the experts cited, interest rates are not expected to rise before 2021.

What factors will support the property market in 2020?

Low mortgage rates, of course.
Etienne de Callataÿ and Bernard Keppenne also cite “the positive impact of the tax shift on household incomes and low bond yields, which could steer investors towards property”.

What are the main uncertainties affecting the Belgian property market?

The primary concern is the environmental transition, which will lead to new requirements.
Julien Manceaux also mentions the measures that the National Bank intends to take to limit excessive household debt.

Now that you are informed about the future of property investment in Belgium, if you would like to learn more about the property market, visit our blog. It is packed with interesting articles covering this field. Or browse and dream about our available properties.