2023-08-23 06:00:00
Namur vs Gembloux: which municipality is the most expensive?
The “Murphy’s law” for Belgian real estate
The Belgian real estate market is also having to deal with internal storms: each Region now has its timetable for improving the energy performance (EPB) of residential real estate buildings. The goal is that by 2050, all buildings will achieve energy neutrality, as required by Europe. Flanders was the first to get started. Since January, buyers in the north of the country are obliged to renovate the property they become owners of if it has an EPB score of category “E” or lower, and this within 5 years of purchase. Even if this obligation is not yet there in Brussels and Wallonia, the PEB of a property already has an influence on its price, with poorly insulated houses and apartments losing their value. It is also a game-changer in the negotiation of a loan between prospective buyers and the bank. “The energy performance of a house is an element which is becoming more and more important”, we explain on the side of Belfius. “If we add this to the unstable international context, we can say it’s a bit like Murphy’s law (“Anything that is likely to go wrong, will go wrong, and at the worst time”, Editor’s note) for Belgian real estate, insists John Romain. A buyer whose house does not meet energy standards often has significant additional costs, around 50,000 euros, to renovate his property”.
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“There is less activity, fewer potential buyers on the market and therefore the price negotiation margin is higher for the potential buyer.”
The savers, the turkeys of the farce
What cool buyers. Over the first seven months of 2023, loan applications fell by around 45% compared to the same period last year at BNP Paribas Fortis, figures comparable to those provided by Immotheker Finotheker (-42% ). “Fortunately, savings books have a low return because it makes it possible to have the effect of communicating vessels of money to supply the real estate market in this delicate period, insists Mr. Romain. That said, it is not cheerful for the savers who are currently being cheated by the system”. In short, according to the specialist, this is the “good period” to buy property in Belgium. “There is less activity, fewer potential buyers on the market and therefore the price negotiation margin is higher for the potential buyer. But we have to move quickly because the rates will continue to rise. ” For Valery Halloy, spokesperson for BNP Paribas Fortis, “buyers now have control over years of frenzy on the real estate market during which the properties were barely sold when the advertisement was published, sometimes even without a visit”.
What factors influence the price of a property?
The end of ten “particularly interesting” years
Buyers who are however resigned: they do not expect to see rates fall in the short or medium term. “Borrowers are still overwhelmingly opting for the fixed rate (85%) rather than a variable formula (15%),” says Mr. Halloy. No doubt they fear that the rise in rates will continue for a while”. At ING, as at BNP Paribas and Belfius, the posted rates are no longer lower than 4%, or even 4.5% (“but these are the highest possible rates, which are not representative of the actual rates charged by different banks.”). The bank with the effigy of the lion remains cautious. “The rates remain relatively volatile at the moment it is difficult to predict a clear trend”, analyzes the spokesman Gianni De Muynck. According to Mr. Halloy, the current rates remain however “more than acceptable from a historical perspective”. “For 10 years, the mortgage market has been particularly interesting for the borrower with rates oscillating around 1%. But if we go back further in time, the rates varied between 5 and 7% and that did not prevent access to property”. An opinion that John Romain does not necessarily share. “Even if high rates might, in the long term, reduce the price of real estate, it is becoming more and more complicated to become a homeowner in Belgium.”
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