Against a backdrop of geopolitical tensions, rising interest rates and falling purchasing power, the Belgian property market is entering a transitional phase.
The US-Israeli war against Iran is creating new economic uncertainties, the impact of which will depend heavily on the duration of the conflict. The first effects are already being felt through rising energy prices, which are reigniting the risk of inflation.
"The situation evokes memories of the 2022 energy crisis, which followed the Russian invasion of Ukraine," said developer Matexi and property website Realo in a press release. "Today, a similar pattern – with rising costs and increasing inflationary pressure – threatens to repeat itself."
They stressed that the war in the Middle East could cause a "new shock" on the Belgian property market, partly due to the sharp rise in energy prices.
As a result, the total construction cost for new-builds "could rise significantly", and higher mortgage rates would "put pressure" on households' borrowing capacity and "further jeopardise" the affordability of new-builds.
Adjusting mortgage rates
The European Central Bank is expecting inflation of 2.6% in the eurozone in 2026 – up from 1.9% previously, and therefore above its 2% target.
In this context, experts believe that a tightening of monetary policy is becoming increasingly likely; the markets are anticipating three interest rate hikes by the end of 2026, while the Belgian ten-year government bond yield (OLO) had already risen by around 0.50 percentage points in March.
This rise is gradually feeding through to financing conditions and prompting banks to adjust their mortgage rates.
"Against a backdrop of geopolitical uncertainty and persistent inflationary pressures, a gradual rise in interest rates appears a plausible scenario in the coming months," said Ruben De Winne, Product Manager for mortgage loans at Belfius Bank, in a press release.
"An initial effect is already visible, with mortgage rates rising by around +0.30 percentage points in March 2026," he stressed.
Illustration picture shows the entrance to the Belfius building. Credit: Belga
Although this rise is not yet reflected in the average interest rates of loan applications signed in March, it has already been factored into new simulations by banks.
The upward trend in mortgage interest rates, combined with pressure on purchasing power, could dampen demand in the coming months, Immoweb stressed.
Therefore, the market would evolve towards a more cautious phase, characterised by lower borrowing capacity, more moderate price rises and possibly a decline in the number of transactions.
According to the Centre for Consumer Credit (CKP), the number of registered loans in January and February fell by 22% compared with the same period in 2025.
Falling number of loans
Although the impact of the situation in Iran remains uncertain and depends on the duration of the conflict, property purchasing power is already showing signs of decline. This refers to the number of square metres that a Belgian household (two adults, married or in a civil partnership) with a median income can purchase using a mortgage.
After stabilising at around 108 m² at the start of this year, purchasing power is now being affected by rising mortgage rates, which rose by +0.30 percentage points in March 2026, according to Belfius Bank.
Assuming prices and incomes remain constant, this represents a decline in property purchasing power of approximately 3 m², dropping the average to 105 m².
This trend could well continue, Immoweb warned. In March 2026, the Belgian ten-year interest rate rose by approximately 0.50 percentage points. If this increase is fully passed on to mortgage rates, a further rise of around +0.20 percentage points could follow in the coming weeks.
Credit: Belga
Immoweb has simulated the impact of this scenario, stressing that this is a "purely illustrative" scenario, given the current uncertainty and volatility. In its simulation, property purchasing power would fall to approximately 103 m².
"If the rise in the Belgian ten-year interest rate in March 2026 (approximately +0.50 percentage points) is fully passed on to mortgage rates, this would lead to a loss of approximately 5 m² in property purchasing power, bringing households closer to the 100 m² threshold," said Immoweb economist Jonathan Frisch.
In this context, financing conditions are gradually tightening, pointing to more subdued market dynamics in the coming months. Prices continue to rise, but are showing the first signs of a slowdown.
In the first quarter, residential property prices in Belgium rose by +0.7%, to an average of €2,409/m², according to Immoweb. This trend is in line with previous quarters and confirms the market's resilience in an economically uncertain environment, characterised by structurally higher interest rates.
However, the rise remains moderate. Compared with the previous quarter (+0.6%) and the same period last year (+0.7%), the recent trend is continuing. It is, however, higher than in the same quarter of 2024 (0%) and 2023 (0.2%).
Change in pace?
Property inflation, which measures price trends over the last 12 months, now appears to be levelling off and even falling slightly in March 2026. This movement may mark the start of a change in pace, following the clear recovery in 2025.
"The price recovery in the first half of 2025 was clear in all three regions in Belgium, thanks to temporarily more favourable mortgage interest rates," said Frisch.
"However, the effect was particularly noticeable in Flanders and Wallonia, partly supported by the reduction in registration fees for the sole owner-occupied home," he added.
Flanders maintained strong momentum in the first quarter of 2026 (+0.9%), while Wallonia showed a more moderate rise (+0.4%), described as a slowdown compared to the first quarter of 2025 (+0.9%). Brussels, meanwhile, lies between the two (+0.5%), but is also less dynamic than last year (+1%).
Due to persistently higher mortgage interest rates, combined with limited purchasing power caused by already high price levels and unchanged registration fees, the Brussels market has shown more moderate growth than the other regions for two years now.
