Home ownership in Belgium fell to a historic low in 2022, reports L’Echo, citing high mortgage rates and stagnant house prices.
The newspaper quoted the National Bank of Belgium’s annual report, stating that the repayment burden of a new mortgage loan rose last year from 24.7% to 27.1% of households' net disposable income.
"This figure is close to the historically high level seen in the early 1980s and the one that preceded the 2008 global financial crisis," the NBB told L’Echo.
According to L’Echo, the situation deteriorated further in 2023. While rates continue to rise, sometimes reaching 4%, real estate prices (which had risen by 7.5% in 2021 and 8.2% in 2022, according to the Federation of Notaries), are stagnant but are not yet showing signs of a real decline.
In short, becoming a homeowner has never been so complicated. Does this mean that renting in Belgium is more attractive than owning a home?
Costly affair
The average price of a house is €578,753 in Brussels and €235,036 in Wallonia, according to Fednot. Prices vary greatly in the south of the country: a house in Hainaut can be bought for about €195,000 euros, while in Walloon Brabant, prices can be close to those in Brussels.
Add to this the registration and notary fees, property tax, maintenance on the house, and other extras, and the costs start to add up.
Credit: Belga/ Benoit Doppagne
If you rent, however, things are not that different. The average rent is currently €1,742 per month in Brussels and €800 per month in Wallonia for a terraced house, according to the latest Federia barometer.
Over a period of 20 years, with an annual rent indexation of 2.5%, the Brussels tenant will have spent €547,335 in cumulative rents. The renter in Wallonia will have paid €251,359. That's more or less the average price of a house in their area.
Life choices?
In most cases, the monthly rent will be lower than a monthly mortgage payment, meaning that the tenant could save a little more than the homeowner over a period of 20 years of renting.
However, their savings capacity will decrease over the years due to rent indexation. This is different for homeowners, who have a fixed rate, so their monthly payment will remain constant, removing the uncertainty of an increase.
For those who can choose between renting and buying, the main factor is a sense of security and what a person wants from life.
Some enjoy the security and stability of owning their own property. For others, the freedom to move with more ease, and to have certain costs and responsibilities – offset by the lack of ownership – put on the landlord, can make renting more attractive.
