It will probably take until 2025 for house prices to again rise faster than inflation in Belgium, ING bank predicted Thursday in its latest real estate study. The pace of renovations will also need to accelerate sharply to achieve an emissions-neutral balance by 2050, the bank's analyses show.
ING forecasts that house prices in Belgium will fall by 0.5% this year, partly because of the sharp rise in interest rates that is making affordability even more difficult. In January 2023, figures from the National Bank of Belgium show that the number of mortgages granted in the country actually fell by 45% compared to January 2022. These are now at the lowest level in over 16 years.
Mortgage rates are expected to rise further in the first half of the year, which will further dampen the momentum in the housing market.
The bigger picture
The expected fall in prices in Belgium remains relatively modest compared to some neighbouring countries, it analyses. In the Netherlands and Germany, a fall of 6 to 7% is expected this year, while prices there had also fallen in the second half of 2022
While the price correction in Belgium may be limited, the actual price fall (adjusted for inflation) will be much larger, ING notes. “According to our projections, Belgian property prices will remain below inflation for three consecutive years and the real correction in property prices could therefore reach 11% between 2022 and 2024,” predicts economist Wouter Thierie.
Belgium is also lagging behind EU targets for climate neutrality. The pace of renovations in Belgium will indeed have to accelerate sharply to achieve an emission-neutral balance by 2050.
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With carbon emissions almost twice as high as the European average, Belgium is one of the worst performers in terms of residential greenhouse gas emissions per person.
73% of domestic energy consumption in Belgium is used to heat buildings – significantly more than neighbouring countries and the European average. Yet although high energy prices have considerably reduced the payback time for energy renovations, many homeowners in Belgium are reluctant to carry out energy renovations. The trend is displayed in the slowing pace of eco-renovations.
There are also many non-financial obstacles (payback period, effect on the EPB score and the value of the house, ideal sequencing and planning of energy renovations, technical, administrative or even legal knowledge) that households face when considering renovations.
