Belgian properties became slightly more affordable in 2023 but with buyers returning to the market, prices are expected to go up again, ING forecasts.
The banking group predicts a 3% jump in property prices in 2025 in a real estate study published on Monday. A rise in the number of transactions will likely drive up residential property prices after a two-year dip in enthusiasm to buy homes. However, property affordability slightly improved in 2024.
"Incomes continued to be indexed in response to the inflation wave we experienced, while interest rates slightly eased," ING economist Philippe Ledent noted in a press conference.
No further interest rate reductions
The bank foresees no more reductions to the long-term interest rates in the coming months. "The European Central Bank recently announced new rate cuts, but these have already been factored into interest rates," Ledent said.
ING economists expect many buyers to drop their current wait-and-see approach once they understand that interest rates will not revert to pre-2022 levels. "Incomes will continue to be indexed in a market that should become more accessible," the study highlighted. In addition, the reduction in registration fees in Wallonia is expected to boost housing demand.
The number of transactions is therefore projected to rise more significantly in 2025, pushing up prices. The bank anticipates an average housing price growth of 3.0% in 2025 and 3.8% in 2026, following a more modest increase of 0.5% in 2024.
European Central Bank President Christine Lagarde. Credit: Belga / James Arthur Gekiere
The cost of energy-efficient homes
Over half of Belgians believe that buying a home is currently unaffordable, the same study shows. The majority of respondants said stricter environmental regulations will make energy-friendly homes even more expensive; just 34% thought this would also be the case for less energy-friendly homes.
There was a momentary increase in home renovations in 2023, despite rising interest rates at the time. ING notes that this was due to untenable energy prices and a desire to cut costs.
Credit: Belga
74% of respondents who own the property they live in have taken at least one measure to make their home more energy-efficient in the last three years. This was in a bid to cut costs rather than concern for the environment, ING points out.
"Convictions about the environment and sustainable development are not in the top three, unlike in other countries," the bank observed. Just one in five respondents said they would renovate their property if obliged to do so by environmental regulations.
