Last year was brighter for the mortgage market, according to the annual report of BNP Paribas Fortis, the country’s leading bank, released on Thursday.
The number of mortgage requests saw a significant rebound, up by 24% compared to 2023.
After a sharp slowdown in mortgage applications in 2023 (-31%) and a sluggish start in early 2024, the residential property market recovered in the second half of the year.
"This recovery shows that prospective borrowers are returning to the property market," commented BNP Paribas Fortis, ten days before the Batibouw fair opens. Among applicants, young people under 35 received 42% of mortgage loans, down from 47% in 2023.
Single people and single-parent families accounted for about one in three applications (31%), similar to the previous year. Meanwhile, 12% of loans were granted to people over 55, up from 7% in 2023.
The average amount borrowed continued to rise, reaching €235,500 for the purchase of an apartment (+7% compared to 2023) and €231,200 for buying a house (+1%).
The Brussels-Capital Region led with an average amount borrowed of €280,000 (+6%). Next were Flanders with €235,000 (+6%) and Wallonia with €222,000 (+7%).
Fixed rates remained the most popular, chosen by 96% of borrowers for their stability. The share of variable interest rate loans stayed low at 4%.
Concerning interest rates, BNP Paribas Fortis does not expect them to decrease sharply soon, predicted the bank’s chief economist, Koen De Leus.
The average interest rate for mortgage loans longer than ten years is currently around 3%, after peaking between 3.5% and 4% in 2023.
"We have seen a notable decrease," noted Mr. De Leus. "And it might decrease a bit more depending on the European Central Bank’s stance."
He suggested that an interest rate of 2.5% to 3% could become the "new normal" for some time.
After a relatively "flat" year for price fluctuations, the financial institution expects a slight increase of 3% in 2025 and 3.6% in the following two years.
“Purchasers’ purchasing power and solvency continue to improve. The rebound observed in 2024 will continue in 2025, with young first-time buyers potentially standing out,” the bank concluded.
