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Everything you need to know is included in our Belgium Property Pack
Are you thinking of investing in property in the land of Chocolates? Are you wondering if the prices are adequately positioned?
Market timing is a subject where people have different perspectives. Your Belgian friend might tell you that now is the ideal time to buy property, while your colleagues in Brussels may think that prices will soon decline.
At Investropa, when we create articles or update our pack of documents related to the real estate market in Belgium, we use factual data and statistics to analyze information, minimizing biases and uncertainties caused by opinions.
We have carefully gathered and analyzed official reports and government website statistics. Using this information, we have created a reliable database. Here's what we found that can help you decide whether it's a good time to buy real estate in Belgium.
We hope this article proves valuable to you.
How is the property market in Belgium now?
Belgium currently stands out for its remarkable stability
Positive
Stability is the first indicator to look at because it offers a solid foundation for property appreciation and reliable returns on investment in real estate. It is an information you need as a foreigner buying a property in Belgium.
You probably already know that Belgium is a very stable country. The last Fragile State Index reported for this country is 31.9, which is an exceptional number.
Belgium has a long history of compromise between its various language and cultural groups, leading to a strong sense of national unity and stability. Additionally, its parliamentary democracy has been in place since the mid-19th century, allowing for a peaceful and consistent system of governance.
Now, let's examine the predictions for the economy.
Belgium will keep growing steadily
Positive
Before buying real estate, check the economic viability of the country.
Based on the IMF's outlook, Belgium will end 2023 with a growth rate of 0.7%, which is quite flat. Regarding 2024, the experts say 1.1%.
However, this low number is just for the short-term, as Belgium's economy is expected to increase by 5.3% during the next 5 years, resulting in an average GDP growth rate of 1.1%.
The moderate growth rate in Belgium is beneficial for someone looking to invest in property because it provides a steady increase in value over time, while avoiding the risk of a volatile market. Additionally, it allows for a more predictable return on investment.
Now, let's delve into other metrics worth exploring.
Belgian business owners show concern regarding the economy
Negative
While it's worth considering the GDP forecast, it's crucial to keep in mind that it's produced, as mentioned, by the IMF, which is a foreign institution, thus not representing the views of people in Belgium about their own economy. Luckily, in Belgium there is an official metric that is frequently communicated. This doesn't apply to every country, so we're in luck.
The Business Consumer Index (BCI) is a metric that assesses how optimistic business leaders are about the current and future state of the economy. Surveys and assessments are conducted to obtain this data.
The National Bank of Belgium's data indicates that the Business Confidence Index is currently -9 for Belgium. To help you with interpretation, a pessimistic outlook is typically associated with a negative BCI score.
A year ago, business operators were not very confident either. The BCI score was at 2.
A lack of confidence among local businesses in Belgium can create a subdued property market. Economic uncertainty may lead to reduced investment and slower property price appreciation. Buyers might face limited options in terms of available properties and potentially experience a decline in demand, making it a challenging environment for property purchases.
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Belgium is providing less building permits
Neutral
If you're contemplating purchasing property in a country, it's advisable to consider the number of construction permits granted. More building permits being delivered suggests an increased belief in the positive trajectory of the property market.
Unfortunately, the number of building permits granted is falling in Belgium.
In the past year, according to Statistics Belgium, the number of building permits delivered by the Belgian municipalities fell by 3.5%, from 31,718 to 30,615 units.
Clearly, this is a negative sign. Let's explore further data.
One last point to consider - a decline in building permits directly affects the availability of properties. In such a situation, it is probable that housing prices will see an increase in Belgium in 2024.
Belgium's property prices are steadily climbing to new heights
Positive
Belgium's home prices have increased by 26.1% in 5 years according to eurostat.
It means that if you had bought a townhouse in Brussels for $500,000 five years ago, then it would now be worth around $631,000.
Currently, the real estate market is experiencing a pleasant and consistent growth in property prices, indicating a stable and positive trend.
Who doesn't like a steady growth? While buying property in Belgium at a discounted price might not be feasible at the moment, you might be banking on a favorable trend that promises long-term benefits.
You can find a more detailed analysis of the real estate prices in our property pack for Belgium.
Everything you need to know is included in our Belgium Property Pack
Belgium's population is getting (a bit) richer
Positive
When you're looking to buy real estate, population growth and GDP per capita deserve careful consideration because:
- a growing population means more people needing homes
- a higher GDP per person means people have more money to spend on housing (which can lead to increased property value over time)
In Belgium, the average GDP per capita has changed by 4.0% over the last 5 years. Though not substantial, there is still a positive trend of growth.
This means that, if you purchase a renovated townhouse in Brussels and rent it out, you will find that each year, you'll attract more tenants with sufficient funds to cover the rent.
If you're considering purchasing and renting it out, this trend is a good thing. Then, the demand for rentals is likely to go up in Belgian cities, such as Brussels, Antwerp, or Ghent in 2024.
Properties promise modest rental yields in Belgium
Neutral
Rental yield is a common factor considered in real estate investing.
It is the annual rental income generated by a property divided by its purchase price or market value. For instance, if a property in Belgium is purchased for €300,000 and generates €18,000 in annual rental income, the rental yield would be 6%
Based on the data provided by Numbeo, rental properties in Belgium promise gross rental yields from 3.2% and 5.9%. You can find a more detailed analysis (by property and areas) in our pack of documents related to the real estate market in Belgium.
It suggests a satisfactory level of income relative to the property's value.
As previously observed, the supply of real estate will remain constant, indicating that property prices are unlikely to change. However, there might be a slight growth in the number of affluent tenants. Consequently, rental yields might increase in Belgium in 2024.
Everything you need to know is included in our Belgium Property Pack
In Belgium, inflation is anticipated to be moderate
Neutral
Inflation is the erosion of the value of money.
It's when your typical plate of Belgian fries costs 4 euros instead of 3 euros a couple of years ago.
If you're considering investing in a property, high inflation can bring you several advantages:
- Property values tend to increase over time, leading to potential capital appreciation.
- Inflation can result in higher rental rates, thereby increasing the cash flow from the property.
- Inflation reduces the real value of debt, making mortgage payments more affordable.
- Real estate can act as a hedge against inflation, preserving the value of the investment.
- Diversifying into real estate provides stability during inflationary periods.
As per the IMF's forecasts, the inflation rate in Belgium will increase by 8.5% over the next 5 years, with an average annual increase of 1.7%.
It means that Belgium could experience a moderate rate of inflation in the future. Then, prices would rise. It might become more expensive to buy in the future. However, if you buy now, your investment might appreciate and you can sell for a higher value later.
Is it a good time to buy real estate in Belgium then?
Time to conclude !
2024 presents a promising opportunity to invest in property in Belgium due to a combination of favorable signals. Notably, Belgium's remarkable stability on both political and economic fronts enhances its appeal as a secure investment destination. The country's consistent growth trajectory further reinforces its attractiveness, with positive economic indicators indicating ongoing prosperity. As property prices continue their upward trend, investors can anticipate potential appreciation in property value, making it a compelling time to consider real estate ventures.
While the signals are generally positive, certain aspects remain neutral. Belgium's recent decrease in building permits could indicate a potential slowdown in new property developments. Additionally, while properties offer modest rental yields, the stability of the market and the overall economy provide a sense of reliability for investors seeking steady returns. The anticipation of moderate inflation adds to the neutral landscape, suggesting that property investments may retain their value without excessive price fluctuations.
However, it's essential to acknowledge some negative signals impacting the investment climate. Concerns expressed by Belgian business owners regarding the economy could cast a shadow of uncertainty. These worries might stem from various factors, including global economic shifts or local policy changes. Prospective investors should carefully monitor these concerns to assess their potential impact on the property market and make informed decisions based on evolving economic conditions.
In conclusion, 2024 holds promise for property investment in Belgium due to its stability, steady growth, and rising property prices. While some neutral factors, such as decreased building permits and modest rental yields, need consideration, the overall positive indicators outweigh potential drawbacks. It's prudent for investors to stay vigilant about negative signals such as economic concerns expressed by local business owners. By staying informed and proactive, investors can seize the advantageous conditions that Belgium's property market presents in the coming year.
We wish this article has been of help!. If you need to know more, you can check our our pack of documents related to the real estate market in Belgium.
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This article is for informational purposes only and should not be considered financial advice. Readers are advised to consult with a qualified professional before making any investment decisions. We do not assume any liability for actions taken based on the information provided.
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