Over the past three months, 2.2 per cent fewer homes have been sold in Belgium in comparison with the same period last year. This is clear from the latest information from the estate agents’ property barometer. The cause is the sharp rise in interest rates on mortgages. “You’re now paying 8.9 per cent more per month than a year ago,” calculates John Romain of independent mortgage advisers Immotheker Finotheker. House prices, too, continue to rise.
Sales of houses in Belgium have fallen particularly sharply, according to figures from the quarterly property barometer published by Fednot, the Federation of Notaries. Over the past three months, 2.8 per cent fewer houses were sold, whilst the decline in flat sales remained relatively limited at 0.4 per cent. Taken together, this means the overall Belgian housing market has contracted by 2.2 per cent.
In Flanders, the decline is smaller. Over the past quarter, 1.2 per cent fewer houses were sold and 0.7 per cent fewer flats. The number of property purchases has fallen in all Flemish provinces, with the exception of Flemish Brabant, where a slight increase of 1 per cent has been recorded.
Limburg, on the other hand, is the worst performer, with a fall of 5.1 per cent for flats and 2.4 per cent for houses.
Interest rates are to blame
The reason for this decline is the sharp rise in interest rates on mortgages, says notary Bart Van Opstal. “Interest rates have risen, which means that mortgages have also become more expensive.”
In August, interest rates reached their highest level in 12 years and have since risen even further. And that has a twofold effect, explains Van Opstal. “It is more expensive to take out a loan. If you take out a loan for an average house price and the interest rate rises by 1 per cent, you can easily end up paying hundreds of euros more per month.”
As a result, investors are also looking for alternatives to the property market: “They are now opting more for alternatives that offer higher returns, such as bonds. That is why they, too, are less active in the property market.”
Logically, a cooling of the market should be followed by price falls, but these have yet to materialise, Van Opstal observes. “We are in a prolonged period of price rises. House prices have risen by around 3 per cent since last year, whilst flat prices have risen by 2 per cent.”
A house in Flanders cost an average of 398,182 euros during the past three months. Last year, the figure was 384,781 euros, according to the notary barometer. Prices have risen by 3.5 per cent in the space of a year. Over the past five years, there has even been a price increase of 21.5 per cent. In 2021, a house in Flanders cost an average of 327,785 euros.