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Last Updated: May 05, 2014




Belgium’s housing market is weakening. Nationwide house prices rose by only 0.23% in 2013, after increases of 1.12% in 2012, 3.45% in 2011, and 4.61% in 2010, according to Eurostat. When adjusted for inflation, house prices actually fell 0.61% in 2013.

During 2013:
  • In Brussels-Capital region, regular house prices increased by 4.3% (3.1% inflation-adjusted) to €368,941
  • In the Flemish region (Flanders), prices of regular houses rose by 2.1% (1% inflation-adjusted) to an average of €212,265
  • In Walloon region (Wallonia), regular house prices increased 0.9% (-0.2% inflation-adjusted) to an average of €147,816

By property-type:
  • Villas, bungalows and country houses fell in price by 0.3% y-o-y, to €332,603 in 2013.
  • Apartments, flats, and studios rose by 3.4%, to an average of €207,886.
  • Building plot average prices increased by 2.5%, to €110.90 per square metre.

During Belgium’s housing boom (2000-Q3 2008), nationwide house prices soared by 129% (86% inflation-adjusted). The housing boom was driven by low interest rates and increased competition between banks; and strong economic and wage growth.

Since the crisis, house prices have followed the course of the economy.  In years when the economy was strong, house-prices rose.  When the economy was weak, house prices stagnated.  The Belgian economy expanded by a meagre 0.2% in 2013, after contracting by 0.1% in 2012, according to Belgostat.

The economy is projected to expand by 1.22% in 2014, according to the International Monetary Fund (IMF).  In the first quarter of 2014, the economy grew by 1.2% from the same period last year, the highest growth since Q3 2011.

Belgium annual house price change graphResidential construction is now increasing. In January 2014, the total number of dwelling permits issued rose by 32.7% y-o-y to 5,000 permits, based on latest figures from the National Bank of Belgium. In Flemish region, the number of dwelling permits surged 44.9% to 3,846 units over the same period. In Walloon region, permits were up by 7.5% to 963 units. However in Brussels, dwelling permits dropped 12.8% to 191 units. In 2013, there were about 23,941 dwelling permits issued in the country.  In February 2014, total mortgage loans were up by 1.82% €107.75 billion, according to the National Bank of Belgium.

The average interest rate for housing loans with an initial rate fixation (IRF) of up to 1 year was 3.10% in February 2014, according to the European Central Bank (ECB). The average interest rate for housing loans with an IRF of over 5 years was 3.58%.

Analysis of Belgium Residential Property Market »


RENTAL YIELDS
Last Updated: May 04, 2014



Gross rental yields in Brussels range have improved over the past year. Gross rental on apartments in Brussels range from around 4.45% to 5.54%, while yields on houses range from 3.66% to 4.88%. Meanwhile, the difference between the yields on small properties, which tends to be higher, and those on larger properties, has shrunk.

Square metre (sq. m.) prices of apartments and houses in the prime districts of Brussels have been increasing, according to the latest survey of Global Property Guide. So too have rents.

All of the apartments and houses included in our survey are located in the prime areas of Brussels. The prime areas are Auderghem, Brussels City, Etterbeek, Ixelles, St. Gilles, Uccle, Woluwe-St. Pierre, and Woluwe-St. Lambert. Our survey included around 2,300 apartments and houses.

Read Rental Yields  »



TAXES AND COSTS
Last Updated: Aug 02, 2013



Rental Income: Personal income tax range from 25% to 50%, depending on the taxable net income. The taxable net income is the cadastral value, increased by 40%, minus deductible expenses. As a result, the effective rental income tax is a bit lower than the headline rate, ranging from 9.22% to 23.07%.

Capital Gains: Capital gains tax of 16.5% is payable on gains on developed property held for less than five years. After a holding period of five years, no Capital Gains Tax is payable.

Inheritance: Inheritance tax rates in Belgium are progressive and vary according to the degree of kinship, region where the inheritance is opened, and the share inherited by each of the heirs.

Residents: Residents are taxed on worldwide income at progressive rates, from 25% to 50%.

Read Taxes and Costs  »



BUYING GUIDE
Last Updated: Aug 02, 2013



Closing costs are high in Belgium, between 14.60% and 27.60% of property value. The bulk of the cost is accounted for by transfer duties at 10% or 12.5%, depending on the propertyís location. Roundtrip costs for new properties are much higher because of the 21% VAT.

Read Buying Guide  »



LANDLORD AND TENANT
Last Updated: May 30, 2006



Belgian law is pro-tenant.

Rents: Rents can be freely negotiated but rent increases above the inflation rate cannot be written into the contract. If there is a written contract, the rent will be automatically adapted once a year in accordance with the cost of living. Deposit payments must not exceed three monthís rent.

Tenant Security: Belgiumís landlord and tenant law is restrictive as regards the length of rental contracts. The main options for the duration of a lease are: a contract of 9 years and, alternatively, a contract for less than three years.

Read Landlord and Tenant  »



ECONOMIC GROWTH
Last Updated: May 05, 2014


Belgian economy gradually recovering

BelgiumBelgium, with more than 11 million people, is the sixth-largest economy in the Eurozone. The country has a GDP per capita of US$45,384 in 2013, according to the International Monetary Fund (IMF). Brussels, the capital, is the headquarters of the European Union (EU) and the North Atlantic Treaty Organization (NATO).

From 1997 to 2007, the country enjoyed a healthy economic growth of about 2.4% per year. However due to the global crisis, the economy contracted by 2.8% in 2009, after a measly growth of 0.99% in 2008. The economy bounced back strongly in 2010, with a real GDP growth rate of 2.3%.

The Belgian economy contracted again by 0.14% in 2012, from a real GDP growth of 1.8% in 2011, mainly due to the adverse impact of the eurozone debt crisis, according to Belgostat.

The Belgian economy expanded by a meagre 0.2% in 2013. In the first quarter of 2014, the economy grew by 1.2% from the same period last year, the highest growth since Q3 2011.

The economy is projected to expand by 1.22% in 2014, according to the International Monetary Fund (IMF).

In February 2014, the country’s nationwide unemployment rate stood at 8.5%, according to Belgostat. However, this is still below the euro area’s average unemployment rate of 11.9%.

BelgiumFalling inflation is a concern, as elsewhere in the eurozone.  In March 2014 inflation was 0.9%, according to Belgostat. In 2013, the inflation rate slowed to 1.2%, from 2.6% in 2012, 3.4% in 2011, and 2.3% in 2010.

In 2013, the country’s budget deficit stood at 2.7% of GDP, down from 3.9% in 2012, and 3.7% in 2011, according to the National Bank of Belgium. The deficit was higher than the 2.5% of GDP that was agreed with the European Union (EU) but still below the EU limit of 3% budget deficit.

Belgium’s national debt amounted to 99.7% of GDP in 2013, within the limits set by the EU for Eurozone countries.

Belgium’s next federal election will be held on May 25, 2014.








  • Strong demand for rental units
  • Moderate to high transaction costs
  • Tiresome tenancy length limits
  • Moderate to high taxes
RESIDENTIAL PROPERTY FACTS
Price (sq.m): €3,124 For a 120 sq. m. property, usually an apartment.
Rental Yield: 4.36% For a 120 sq. m. property, usually an apartment.
Rent/month: €1,361 For a 120 sq. m. property.
Income Tax: 9.22% Assumptions: Owners are a non-resident couple drawing US$ / €1,500 per month in rent, with no other local income.
Roundtrip Cost: 19.10% The total cost of buying and then reselling an apartment. Includes:

* all transaction taxes and charges:
* lawyers' and notaries' fees
* agents' fees

Assumptions: The buyers are non-resident foreigners. The apartment cost US$250,00 / €250,000.
Cap Gains Tax: n.a. Assumptions: The property was bought for US$250,000 / €250,000, and sold 10 years later, after a 100% appreciation.
Landlord and Tenant Law: Pro-Tenant Rating is based on a detailed study of each country’s law and practice.

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