Outlook for Real Estate in Belgium

The past two years have not been a walk in the park for the real estate sector in Belgium either. Now that the corona crisis and the explosion in energy prices are behind us, everyone is looking longingly to the reset of the real estate sector. And there is hope for improvement. The sharp upsurge in inflation in 2022-2023 has been largely reversed, even if the latter part of the ride is more laborious and slower than expected. At the same time, challenges are certainly not lacking. That funding or loans will again become almost completely free is quite unlikely. But it’s not just the interest rates.  The measures for support by the governments due to the corona and energy crises have largely worn off. Governments at home and abroad need to keep their balances in check. The tsunami of elections during 2024, with often hard-to-predict and surprising results, and on-going geopolitical tensions, did not and still do not immediately contribute to increased industry confidence for the near future. And confidence is exactly what the sector needs to launch its “renaissance”. After all, there is no doubt that that demand for real estate will also be quite strong in Belgium in the coming years.

During the debate ‘Outlook for Real Estate’ in Belgium on Realty 2024, after an introduction with facts & figures by Colliers, a panel of experts will analyze the current market situation in Belgium and give their view on the future. When and how far will interest rates continue to fall and what will be the impact on the real estate market? How will the real estate sector cope with all the challenges and the new economic and geopolitical realities? What returns are realistic? 

The panel will also discuss submarkets, from offices to residential to logistics real estate. What are the projections and what are the areas of concern? There is a lot of talk about office vacancies, but far too little about the acute shortage of sustainable offices. Housing is said to be unaffordable today for more and more people, but at the same time the needs of the housing market are huge. The result? Rents are on the rise. In some neighborhoods of cities like Leuven and Ghent, dozens of prospective tenants for a single house apartment are no exception. There is a need for hundreds of thousands of additional homes, especially housing for single-person families, young and old. The waiting time for social housing is more than four years. To meet climate goals, the pace of sustainable renovations must be tripled.

And what does aging mean for the real estate industry? Are there regional differences? With more and more baby boomers coming of age, the demand for healthcare real estate will only increase. And then there is the student housing market segment, where there is also a need for thousands of additional units in almost all cities offering higher education. For all these segments, the same question keeps coming back: how to balance affordability for the end user (a family, a resident in an assisted living facility or a student) with the return an investor needs to take the risk.

Challenges are not only reserved for office and residential real estate. Even the retail real estate market is not immune to the impact of declining purchasing power and changed consumer behavior…. ‘I was recently in Hamburg. There you hardly see a vacant commercial building in the city center. You can’t say that about the shopping streets in our country. Important shifts are taking place in that sector. There is  the impact of the rise of e-commerce but there are also changed spending habits. People today seem less willing to spend money on fashion but more on travel. Even though, after corona, shoppers do have returned to brick-and-mortar shopping with great pleasure,” says real estate journalist Patrick Luysterman, moderator of the debate. E-commerce played a crucial role in the success story of logistics real estate in the past decade. Will logistics still be the success story in the future in a changing world with increasing protectionism and disrupted supply chains? Or will it be taken over by infrastructure, on land and at sea?

Financing real estate is significantly more difficult in all segments, including listed real estate. There is more competition from fixed-income financial assets. Three years ago, most listed Belgian real estate shares were still quoting at a substantial premium, allowing them to raise extra cash with ease. Today, almost all of them are listing at a discount. Will it get easier again?

And what about the many “new” developments in the market? Negotiations for a sale are running longer. Obtaining permits only seems to have become more difficult. Developers of residential projects in Belgium are now more willing to sell apartments en bloc to institutions. Until recently, they preferred to sell the units of a residential project unit by unit to private buyers. Will this trend bring solace to the rental market?

The formation of the various governments in this country is in full swing. Local elections are coming up in October. What do experts expect from politicians and policymakers? What role can real estate players from our home country or the rest of the world play in realising the governments’ (adjusted) objectives in the areas of living and working?  What real estate taxation should the real estate sector expect from the various governments? What should the sector hope for, what should it fear? You will find out this and much more during the debate ”Outlook for Real Estate in Belgium”.