Real estate prices in our country will continue to rise, but at a slower pace than inflation. That is what the research department of ING Belgium expects. For this year, the bank expects an increase of 5 percent, for next year an increase of 1 percent. A survey by ING also shows that only fourteen percent of those polled think that housing is still affordable for all Belgians.
According to figures from the Belgian statistical office Statbel based on the deeds, real estate prices rose by 7.8 percent in the first three months of the year. The Notary Barometer, which is based on compromises, showed last week that house prices rose by 6.3 percent in the first half of the year compared to the annual average of 2021.
However, activity in the real estate market seems to have cooled somewhat recently: while the number of transactions in January was still 8.9 percent higher than last year, the number of transactions in June fell by 21.7 percent, according to the Notary Barometer. As a result, house prices in Flanders fell by 0.8 percent in the past quarter. The number of searches for the three largest real estate classifieds sites (Immoweb, Immovlan and Zimmo) in the first five months of the year was also 15 percent lower on average than last year.
ING expects prices to continue to rise in 2022 (+5 percent) and 2023 (+1 percent), albeit at a slower pace than inflation, causing real price growth to turn negative. “Although the number of transactions seems to be cooling, the demand for real estate remains high. The number of households will continue to grow in the coming years. Moreover, real disposable income is holding up well thanks to strong employment growth and automatic wage indexation, which will support house price growth,” says economist Wouter Thierie. “On the other hand, rising interest rates since the beginning of this year are making mortgage loans more expensive. In addition, the ongoing war in Ukraine and high inflation are creating uncertainty, potentially allowing home buyers to delay their purchase decision.”
Survey: two out of three think house prices in their own municipality are overvalued
Only 6 percent of those polled in ING’s survey believe that house prices will fall in the next 12 months. Almost a third even expect a strong increase. Two in three think that current house prices in their municipality are overvalued.
In the current context, only 14 percent of those surveyed think that housing (buy or rent) is affordable for most people in our country. Moreover, three quarters think that it will become more difficult to buy a house in the next three years. Among the over-65s, this share is even 83 percent. Young people are generally more optimistic.
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