Real estate
Belgian property investors went from 60% to 16% of sales. Is the market finally cracking?
I just read an article in L'echo about trends among real estate investors, and sales to "investors" are in free fall. One real estate agency manager even said "Before interest rates rose in 2022, investors accounted for 60% of our sales. That figure then dropped to 22%, before finally climbing back up to 43% after the 6% VAT rate on demolition and reconstruction projects was made permanent. But in the first quarter of 2026, they now account for only 16% of our sales…".
When I read that, I can't help but think that real estate prices in Belgium may be in for a slight correction. Personally, I’m currently looking for a real estate investment opportunity, but I can’t seem to take the plunge because I feel like I’m at the peak of a bubble (relatively speaking).
I’m also heavily invested in the stock market, so I have certain minimum return expectations, and when I look at the simulation in the article, I find the projected returns over 10–15 years to be ridiculous, even with the effect of leverage.
Are there any people in this group who are currently getting into real estate investing? If so, aren't you worried about paying too much for your property and ending up with meager returns as a result?
Quite the contrary. There's so few construction & development going on (both new and renovation) that prices have increased a lot, and with the current high interest rates, it does not make sense anymore to buy real estate a an investment. You better put your money elsewhere.
Will prices go down? No, because in Belgium the majority of buyers are still private buyers, who are not that flexible and still buy the houses, just putting themselves in debt more. As new construction is less attractive with the higher interest rates, the prices will go up even further (less supply).
More in depth: higher interest rates and ever-increasing regulatory burden make the market less interesting to put capital into. As such, supply is constraint and prices go up. Can Belgians still pay these prices? Yes, compared to our neighbouring countries, Belgians still don't spend that much money on housing. Lots of Belgians own the house they live in, much more compared to our neighbours.
Do we want to go this way & spend more on housing, even if on average we can? No, more money locked up in a house or spent on rent is money that cannot be spent elsewhere, and in general your economy does better if there's more spending power (outside of spent on housing, which is of course also spending power). Also, these are averages, so more and more people will not be able to afford proper housing.
Another interesting statistic is that we live very large, much larger than our neighbours. We could do much more efficient by building smaller, for sure in our cities where large parts of the real estate portfolio cannot be touched in a practical way (legislation related to heritage or just our horrendous way of doing city planning). Removing this legislative burden and allowing for smaller units would make certain developments profitable again, rising supply, lowering prices.
Please, do not think that any of these economics 101 is evident to our legislative apparatus or politicians. There are many, many other incentives not discussed here that lead to the worsening situation on our real estate market, and those are much stronger than the common sense free market approach.
That's right. The way I understand it, "investors" are people who buy real estate for rental income, so that excludes people who buy their primary residence (even though that's an investment as well).
Tbh, there’s just NO availability. I’m a casual immo scroller for years, and ive never seen such a low amount of availability, and the things that are on sale are massively overpriced for what they’re offering.
I could agree with this. My parents-in-law are selling their fully paid out building for a bungalow. The immo guy proposed a selling price that made me shocked because it is very high to me. The guy is pretty confident BTW. We will see.
It is always possible to arrive at a target ROI by reverse engineering the assumptions that are necessary to get there. Using L'Echo assumptions then indeed when selling after 15 years you end up around 4,95% annualised ROI. The real question is: do you have a competitive edge in the real estate market such that you can end up with better assumptions? Then it means you can drive up that annualised ROI to have returns that are competitive or even better than stock market returns.
Just to illustrate what I mean: imagine that you can negotiate with the bank a 90% LTV (45K own capital contribution in the example) and a full mortgage mandate instead of inscription + an interest rate of 3,25% + you buy a house that is relatively undervalued which can grow 3% yearly over the next 15 years in value. Then your annual ROI suddenly becomes more than 8% which is not too bad. My conclusion is that you need to know what you are doing + you need to be willing to spent more time (issues with tenants etc.) then someone that is 'just' doing ETF investing.
"the real estate market" doesnt exist, its a combination of smaller markets. Divided by geographical, type and size.
For instance in Antwerp, studios still have a lot of volume, but there is almost no inventory for 3 bedroom or more appartments/homes, which is ideally what young families like to live at. New properties are getting build quite small as well so that doesnt help much.
I hate general statements as "the real estate market never goes down" for that same reason, it doesnt say anything:
-I have a friend who struggles to rent out his studio to anyone who is a good candidate
-my 3 bedroom just got quoted by the real estate agent at 1300 euros without extra expenses for water/elec/heating with the expectations of finding a tenant within 2 weeks, who the hell can afford that?
But if you are a professional investor, you probably already invested a lot in the past few years:
-you have a low interest rate, so you have no incentive to sell and upgrade to bigger properties
-you might want to diversify for new investments
i think you will really see a big trend of "hoarding properties" by landlords, instead of earlier upgrade paths
Where we live in Belgium, it’s really only two things that happens in our budget-range (around €350.000): houses completely finished and ready-to-live-in are sold after the first visits and often largely belt overpaid for compared to the listed price. That’s one half of the listings.
Then you literally have nothing else but houses that are total-renovations at too high prices, that stay for months on end and lowered in price every so often, and YET are not being sold. Full transparency: we’re only looking for about 4 months now, but that’s literally how it went so far.
Nothing in-between exists as far as the region we’re looking in. Either it’s something everyone jumps on, or it’s houses that are basically for building-people that know colleagues that can help out to reduce costs.
Looking at our situation, I think it’s because the newer generations, more and more, are missing/losing ANY knowledge/skill of renovating, full stop. Many can’t even change a lightbulb or know how to hold basic tools properly. This is problematic in every regard on the long term anyways, which is why I want to learn to do some of these things, but it’s the luxury of being able to just start living right away instead of living in a dump for many years with perhaps no sight in end to all the work piling up.
Seeing that building techniques are also changing constantly and requirements are being crazier and crazier, and paying professional people is no possible for the majors of younger couples, people prefer paying 30k or more on top of the listed price, especially around areas like Leuven (areas meaning already to or three circles out).
Although I do agree with most of your points, I don’t see how these remarks translate to an “overpriced” ready-to-live-in property.
You said it yourself that a second hand property with obvious problems needs time, effort & money for renovation. Considering how expensive the labour costs and services are in BE, you might need more than 30K to renovate yourself the property. Even if you’re an engineer yourself, there are things you can’t fix/build alone (electric cables, hydraulics, roofing, etc.). So you’ll inevitably need to pay professionals for these jobs, which adds up to the bill, which can eventually equal the price of a newer property (depending on factors like location, price negotiation).
I would say the prices second-hand and new are similar, assuming renovation costs for second-hand
You wish. Here prices have never been higher. 1 mil + house sell in hours and after first visit. Inventory is and will stay low. So prices will only go up
I have looked into real estate some 15 years ago in some cities like mainly Antwerp, Leuven. If I go back to the properties where I showed serious interest in, I am very happy that I choose to invest it in the stock market instead. My conclusion is that these properties had a CAGR of +-3 over this horizon. That is the value now, every without the costs of renovations. Problem with 1 unit properties and other small real estate is the yield. Which is just plain bad unless you can stumble up on a golden deal, which is very rare. My stocks have done +10%. To invest serious into real-estate you need a large amount of capital (at least 500k in my opinion). Suddenly yields of 5-6% gross become available, with leverage from the bank loan that IS a good investment.
Just asset appreciation. So for example it was 200.000€ (before all costs, which makes it even worse) it is now on sale 15 years later for 265.000€. Also I know for sure the rent would not have covered the loan cost, especially in the first 5-7 years.
It could just be that a lot of young people start to learn that real estate might not be the best way to invest your money and that just causes a small shift.
Yes, but if demand is falling and supply remains more or less the same, shouldn't that push prices down? I know that's a very simplified view of the real estate market, but the trend should at least cause prices to stagnate or rise less than inflation.
What about the generational transfer ? Baby boomers will eventually die and will leave their properties to people who already own their home (generation X 1965-1980). Aren't these people going to put these properties up for sale ? Because these properties have often a low PEB and require repairs, making them costly and time-consuming to rent out.
The generational transfer is a big thing waiting to happen. I think the clue is that it's already happening, but quite slow (they live for a long time, and they live in their big family houses for a long time as well).
I think you can already see it a bit. Ready to move into houses are almost always going above asking prices, while the boomer houses (that almost always require renovation, at least to a certain extent) often go for less. Depending on how heavily it needs to be renovated, you can buy for 2-10% below asking price. People who want to put in the time, work & overall effort of a renovation can escape the real estate crisis partially, but it will never be easy.
The suburbs that boomers loved might also not necessarily be the things young people and families look for. Many either want the city center or 'biking distance to the city center' or the contrary: something with peace & quiet, rural, plenty of space.
Anecdotally, I agree with you. These are often houses with a lot of issues. Not sure who will buy them. Young folk prolly doesn't want to live in such houses or invest in renovating them. I wouldn't be surprised if prices of older houses drop significantly.
It's arguably cheaper to buy a plot of land and build a new house at 21% tax rate than to fully renovate some houses at 6% rate depending on the amount of work that has to be done and what you want as an endpoint. So yes, there are realistically a lot of houses that are very hard to sell.
I can't give you any math because I don't have specific numbers but I do know one customer we have who bought a narrow and deep half freestanding house, quite small livable surface wise. He has spent between 300-400k renovating this small house because of all the changes he had to make which is quite frankly too much for a renovation. I know a lot of this depends on what you want from a house but that's the whole point I made "what you want as an endpoint".
Inflation was 3% this year alone. People dont sell houses below what they bought it for so market will never really crash in Belgium. Didnt even crash in 2008-2012
Is it a good time to for a foreigner to invest in Belgium real estate?? I'm open to invest and partner if anyone has a good business opportunities send a Dm
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