In 2016, the number of purchases increased by over 16% in Belgium. And although credit rates may increase slightly this year, there will be no property crisis. On the contrary….
Some 265 billion Euro are sleeping in Belgian savings accounts, 2.5 times as much as in 2002. But over the last 20 years, property prices have benefited from favourable tax and a fall in mortgage rates. The result: in 2016, Belgians invested more than ever in the housing market. The rise is considerable: 16.4% compared to 2015, for a total amount invested in housing loans of… 25.6 billion Euro. This is the result of a survey by Belfius bank, which primarily focuses on property.
Published twice a year, the study shows that over two thirds of the loans granted served to finance the purchase of an existing home, the rest to purchase a new build home. In this respect the new build business has confirmed its fall: it shows a drop of 3% and represents no more than 10% of Belgian property.
2016 was therefore a “good vintage”, boosted in particular by a fall in rates. Thus, in 2016, the rates of loans of 10 years or over fell 0.5% to a record low of 2%. At the same time, the gross revenue of households increased by 2.9%. i.e. twice the growth of our country’s economy. The result: not only do Belgians have a little more resources, but they are more inclined to invest their money in a home.
However, during the last three months of 2016 the most acclaimed product, a 20-year fixed-rate loan, grew from 2% to nearly 3% in most banks. And the question on all prospective buyers’ minds is: are mortgage rates going to rise again in 2017? Yes, the experts say, but in a very controlled manner. We should expect a rise of around 0.5% to 1% in the second semester. Thus, one with no big impact on the property market.