A significant drop in prices on the housing market due to the current lockdown measures is not all that likely, according to Belfius bank.
"The risk of an outright price crash is limited at the moment because several factors are still providing the necessary support for property prices in our country," Belfius said on Thursday. They cite the government's financial measures, low interest rates, and the fact that the number of families is increasing faster than the building of new houses.
"Assuming that the lockdown measures are phased out in the coming months, much of the current damage could be made good later in the year," the bank said.
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That said, the new coronavirus (Covid-19) crisis will leave its mark on the real estate market, and Belgium will not see the record real estate activity of 2019. "The negative impact on economic growth clearly weighs on consumer confidence and can cause plans to build or buy a house or apartment to be postponed," the bank said. "Loss of income due to the lockdown and rising unemployment could also slow down the growth of house prices this year," they added.
Nevertheless, Belfius pointed to the resilience of the Belgian housing market after the financial crisis in 2008. "If the Covid-19 crisis is successfully contained in the coming months, and economic growth picks up in the second half of the year, the real estate market will also be able to benefit," the bank said.
Jason Spinks
The Brussels Times
