Insights into Brussels’s property market dynamics

The property market in Belgium is facing intense affordability pressure due to a combination of factors such as the recent increase in interest rates, steady growth in house prices, and stricter regulations around energy efficiency. At the beginning of 2022, an average-income couple had to allocate 29% of their net taxable income each month to repay a 25-year term loan while borrowing 90% of the price. However, by the end of the previous year, this percentage had already increased to 36%. As a result of deteriorating affordability, many young individuals are staying in the rental market for longer. According to the ING survey, 64% of renters expressed their desire to purchase their own home, but they don't have sufficient equity to do so.


The growth in house prices in Brussels and Belgium has been consistent. Typically, there is a strong correlation between the availability of loans and house prices; when people can borrow more money from the bank, the demand for housing increases, which in turn drives up prices. Despite a decrease of 11% in borrowing capacity for over a year since the beginning of 2022, house prices have continued to rise steadily. The reason for this is the longer average loan maturity, compensating for the negative impact of increased interest rates on borrowing capacity. 


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Market Prices in Brussels and price trends in Belgium

Sales of real estate throughout the country saw a decline of 15% (12.4% in Brussels) from 248,000 in 2022 to 210,000 in 2023 as noted by KBC Brussels. This drop in sales can be attributed to rising mortgage rates, as well as the current economic climate. Additionally, in Flanders, buyers are required to renovate properties with an energy performance rating below D, which has added to the cost of purchasing a property and dampened the enthusiasm of some buyers. The cost of renovating materials also remains high, which has further contributed to this issue. Although houses account for the majority of transactions in Belgium (72.5% of sales), the opposite is true in Brussels, where 65% of transactions are for apartments. Despite the decrease in sales, prices remained relatively stable. House prices remained constant at a national level, but saw a decrease of 2.4% in Brussels. However, it should be noted that prices in the capital are much higher than in the rest of the country. The average price of a house in Belgium in 2023 was €322,780 (+1.1%), while in Brussels, the average price was much higher at €562,489 (compared to €576,576 in 2022). On the other hand, the average price of an apartment in Belgium was €264,792 (+1.6%), while the average price in Brussels was €280,520, which saw a slight decrease of 0.3%. It should be mentioned that the average prices of apartments tend to level out, with smaller differences between regions. However, three-bedroom apartments continue to command prices well above the average, particularly in Brussels, where the average selling price for a three-bedroom apartment is €431,636 (+7.3%).


In terms of house prices, Ixelles surpassed Woluwe-Saint-Pierre as the most expensive district in the capital (and the country) at the municipality level, with an average price of €772,089. Meanwhile, Molenbeek-Saint-Jean came last with an average of €356,897.


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Brussels office market analysis

In Q4 of 2023, Brussels' office take-up reached 83,700m2, according to CBRE's research. This marks the second consecutive year of low activity, which is attributed to both the macro environment with higher interest rates and the attractive market offers. In total, more than 300 letting and sales deals were completed in 2023, resulting in a take-up of 312,000m2. Another notable outcome is the significant percentage of renegotiated contracts, which is a natural consequence of delayed occupier decision-making. Over the past two years, renegotiation deals have exceeded 50% of total take-up, compared to the typical range of 15 to 30%.


Occupier Market Dynamics: Strong Office and Logistics Demands Drive Growth in Brussels

In terms of the market for occupiers, both office and logistics demands appear to be in good health. The Brussels office market is currently benefiting from the EU's significant moves, which account for three of the top five biggest deals this year. Large occupiers in Brussels who are conscious of their ESG profile continue to be attracted to Grade A office spaces. This trend is expected to continue as occupiers optimize their workplace footprint strategies.


There has been an increase in the logistics market due to several significant deals involving big box companies. Additionally, several large-scale development projects in peripheral areas are expected to continue to attract such deals. At present, developers are constructing 363,000m2 of logistics space, with two-thirds of this space dedicated to pre-committed warehouses.


Examining High Street Retail Rent Trends

High street retail rent has experienced a downward trend in recent years due to the pandemic and competition from e-commerce. However, it has remained relatively stable in the past two years. For a typical unit size of 200m2, the Rue Neuve in Brussels and the Meir in Antwerp have a high street retail rent of €1,650m2. The prime rent in shopping centres has remained stable at €1,200m2 per year after an increase in the last twelve months. The prime out-of-town retail parks for an average size space of 1,000m2 are currently at €180m2 per year. Smaller retail units can be more expensive.


Future retail landscape: anticipating major shopping centre developments in Belgium

In 2024, there is a major shopping centre development project expected. The Tubize Outlet Mall (TOM) will be the first outlet centre in the Brussels periphery and will open towards the end of the year. This shopping complex will consist of 80 units, including 17,000m2 of open-air shopping, restaurants, and leisure, as well as housing, an urban farm, and other supportive uses. Several other projects and extensions are planned, but permit issues have delayed them. Broeklin (formerly UPlace) has a new vision for the site, which includes 55,000m2 of shopping 25,000m2 of recreation and HORECA, after scrapping 1,000 parking spots in the latest plans. The Mall of Europe, located within the Brussels ring, has not yet started construction, but a new sports park was recently announced for the Heysel plateau, indicating the desire to improve the site. Woluwe Shopping Centre has received a permit for an extension that includes 7,800m2 of retail but has faced challenges with the Brussels Urban Development Board. In Flanders, Wijnegem SEE has been planning to extend for several years, but the permit introduction was rejected. Wijnegem SEE is one of the most successful shopping centres in Belgium, with very low vacancy rates and the ability to attract major retailers, such as MediaMarkt, H&M Home, HMV, and more, in H2 2023 alone. In Wallonia, Belle-ile in Liege has held a permit for an 11,000mextension for a long time, but it will likely re-evaluate it in light of recent market developments. Moreover, the public inquiry for the redevelopment of Square Leopold in Namur, with a 44,400m2 mixed-use project (including 13,700m2 of retail), just concluded in February 2024.


Future retail landscape: anticipating major shopping centre developments in Belgium

In 2024, there is a major shopping centre development project expected. This January Bruvaco acquired Galerie Toison d'Or from an institutional investor. The gallery has a facade width of 60 metres along the Avenue de la Toison d'Or, and a total retail area of 15,000m².  Galerie Toison d'Or has about 40 retailers, including Fnac, Tommy Hilfiger and Maisons du Monde, and welcomes more than 3 million visitors every year.


For more information, please see:


CBRE. Belgium Logistics MarketView H2 2023

CBRE. Belgium Retail MarketView H2 2023

CBRE. Brussels Office MarketView Q4 2023


Image source - Pexels

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