2023-09-09 03:50:23
The rise in interest rates is emptying the real estate market of its buyers, in favor of rental properties, which are booming.
Over the first eight months of 2023, the number of registered residential leases increased by 10%, going from 156,772 registrations at the end of August 2022 compared to 172,476 registrations over the same period in 2023, according to figures from the FPS Finances. “This is an absolute record over this period,” says spokesperson Florence Angelici. “The explanation is probably multifactorial: impact of the energy crisis and desire to change to a less energy-intensive rental property, downturn in the sales market due to the rise in rates, etc.,” she analyzes.
The observation is identical for the main real estate agencies in the country. “The rental market has been very dynamic since the end of 2022,” says Souheil Marso, head of the rental department. Trevi Brussels, who saw the volume of his rentals increased by 35% between the 1is semester 2022 and the 1is semester 2023.
Rising interest rates
The trend is similar at We Invest Brussels: “Rental intake doubled on 1is semester”, figures Antoine Dupont, rental manager, “the accommodation also stays on the market for less time, because it is quickly rented out.”
This sustained demand for rental properties in the face of stalled sales can be explained, among other things, by the significant increase in interest rates since mid-2022. The average 20-year fixed rate almost tripled between January 2022 and September 2023, from 1.38% to 3.53%, according to data from broker Immotheker Finotheker. In doing so, the purchasing power of potential buyers has taken a serious hit, sometimes pushing them to stay tenants longer and therefore to swell the ranks of rental candidates.
“The first figures for the second half indicate that the increase in rents continues and accelerates.”
Rents continue to rise
And the law of supply and demand does not escape the rental market, rents have been rising for many months now. “We are sometimes surprised by the rents obtained by landlords. Even if we consider them too high in certain cases, it is clear that they are still rented,” notes Antoine Dupont.
The latest rental barometer from Federia (the federation of French-speaking real estate agents) confirms the trend. Rents actually increased in the first half of the year, 3.3% in Brussels and of 2.5% in Wallonia.
In the capital, where more than 90% of rentals concern apartments, the average rent is now close to 1,200 euros, compared to 779 euros in Wallonia. “The increase in rents continues, but less rapidly than in 2022 when it showed a record increase of 4.7%,” indicates Federia.
“But the first figures for the second half indicate that the increase is continuing and even accelerating. 2023 could therefore be particularly marked by the effects of the wave of inflation initiated in 2022“, continues Charlotte De Thay, general director of Federia.
799 euros for a studio in Brussels
Rents tend, in Brussels, to increase more strongly on the smallest units. A studio rents 9.15% more expensive in 2023 and now reaches a monthly rent of almost 800 euros. The rent of apartments increased by 3.85% (1,159 euros) while that of terraced houses fell slightly by 1.22% (1,698 euros).
Substantial differences exist between Brussels municipalities, where the difference in rents can reach almost 500 euros. Woluwe-Saint-Pierre being the most expensive municipality (1,371 euros for an apartment) and Jette the least expensive municipality (879 euros). Some have literally seen the amount of rent explode: Woluwe-Saint-Lambert, Koekelberg and Saint-Gilles display increases of more than 9%. Rents are falling in only three municipalities, Evere (-1.14%), Berchem-Sainte-Agathe (-2.7%) and Saint-Josse (-15.1%).
Wallonia, the cheapest region
The average rent in Wallonia (779 euros) remains cheaper than in Flanders (853 euros) and Brussels. “The difference is such that it costs more to rent an apartment in Brussels (1,159 euros) than a four-storey house in Flanders (1,123 euros) or in Wallonia (1,077 euros),” illustrates Federia.
Also in the south of the country, rents have evolved differently depending on the type of property. Semi-detached houses (three facades) rent 5.3% more expensive than in 2022, while apartments and terraced houses (two facades) increased by +2.54% and +1.11% respectively. Four-front villas tend to decline (-1.1%).
Provincially, rents have all increased and it is Walloon Brabant which is doing well in this gameith an increase of 5.53% for an average rent of 1,069 euros. This province, historically the most expensive in Wallonia, is widening the gap with the others, mainly Hainaut which has the lowest rents (730 euros).
The summary
- The number of new leases registered over the first eight months of the year jumped 10% compared to the same period a year earlier.
- Rents continue to rise, by 3.3% in Brussels and 2.5% in Wallonia according to the latest Federia rental barometer.
- In short, the rental market remains ultra-dynamic in a context of rising interest rates, forcing certain would-be buyers to remain tenants for longer, thus boosting demand.
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