Belgium offers cheap housing for the savvy expat, but prices are still rising after five years of solid growth. Here's our guide to the Belgian market.

Is your Belgian dream home just a handshake away?

Belgium is a paradise for a house hunter compared with most other European countries — if you’re looking for a property with a character, you couldn’t do better than here.

Brussels alone boasts more than 3,000 listed art nouveau houses. But even newly built and more conventional properties are available.

Still, the Belgian market can have its pitfalls, so keep your eyes open!

European trends

Real estate agency ERA says house prices rose 11 percent in Belgium in 2004, coming off an 8 percent rise in 2003. It says prices rose a further 6 percent in the first half of 2005.

Belgium was thus grouped with several other countries showing price rises of more than 10 percent in 2004, such as Britain, Spain, Finland, Luxembourg, France and Sweden.

In Austria, Ireland and the Netherlands, prices rose on average 5 to 10 percent. House prices in several countries, such as Portugal, remained stable, while prices fell in Germany.

And while price rises in Belgium started to slow in 2005, ERA denies speculation the market is about to collapse.

Stabilising price rises

A real estate agent with Immobilière Le Col-Vert in Brussels, Laurent Kleykens, also predicts that prices will continue to rise in the coming period.

"The prices of Belgian houses have been rising during the past five years and the interest rates have been very low for the past two years," he says.

However, Kleykens says statistics indicating an annual 10 percent price rise in the past five years are unrealistic. He predicts prices will continue to rise, but at a slower rate.

This is a natural consequence from exaggerated price demands in some communes, where sellers are imitating higher asking prices and creating over-inflation.

However, asking prices and selling prices are two different things. Rising interest rates will also prove a stabilising factor, Kleykens says.

The Brussels market

According to ERA, average prices in Brussels were EUR 182,211 in 2004, making it the cheapest European capital, trailing London (EUR 328,204), Madrid (EUR 408,000) and Paris (EUR 261,181).

However, notaries say house prices increased strongly in the Belgian capital in 2005, increasing on average by 14 percent. The price rises were attributed to low interest rates and reduced registration fees and capital gains tax.

Notary Gaétan Bleeckx says a family home is becoming too expensive for the average family, who is now looking for more affordable two-bedroom homes with a garden.

However, demand for these properties will also push prices higher.

Meanwhile, Kleykens says favourite locations such as Woluwe-Saint-Pierre and Woluwe-Saint-Lambert, Etterbeek, Uccle and Ixelles are still popular.

Some people are also finding that the northern communes, such as Koekelberg, have some very interesting possibilities. Some prices have risen by 30 percent.

The city centre is also staging comeback due to the inflow of younger and single EU officials who want to live in livelier quarters.

"At the moment, housing demand is high and everybody seems to be looking for the same type of property," Kleykens says.

"Houses with 2-3 bedrooms and within the price range of EUR 250 to 350,000 are the easiest to sell. If the price goes over EUR 500,000 it is already difficult to find buyers, especially if the location is not right."

Supply is also good because the rental market is slow: many property owners prefer to sell instead of lowering the rent.

Beyond the capital

The upward trend in prices spreads beyond Brussels as well.

"It is difficult to compare Brussels with Wallonia, because the properties are so different. But prices are also going up outside of Brussels," Kleykens says.

According to real estate agency ERA, based on the 2,500 homes it sold, prices rose in Flanders by 8.9 percent in 2005 compared with 9.4 percent in 2004.

In contrast, Wallonian house prices have trailed Flemish price rises in 2003 and 2004, but are now said to be catching up.

In 2005, prices rose in Wallonia by as much as 21 percent compared with 2004, but prices in Antwerp fell by 1.3 percent.

Wallonian prices are now more comparable to Brussels and Flanders, but the market is fluctuating and prices can vary.

Expat stories

Laurence and John Bish moved to Brussels with their two children 18 months ago.

The French-English family is an experienced mover after several years spent in different countries and Laurence was pleased to find a real estate agency in Belgium that respected their wishes.

"They were clearly very well educated and not at all pushy. They told us both the positive and negative sides of the houses," she says.

"I was looking for a house so close to the children’s school that they could walk there themselves and also a property with some character and warmth."

When she saw their current house for the first time, she was taken aback by its rough exterior. But inside, the house proved to be exactly what she was looking for and the sale proceeded smoothly.

The listed art nouveau gem in Uccle with some 450sq m and a large garden cost the Bish family slightly more than EUR 700,000.

"Belgium has the best housing market in Europe. My twin sister bought a 120sq m apartment in Paris that cost the same as our house here,” Laurence says.

However, sometimes an apparently good real estate agency can disappoint.

An expat family was initially pleased when their agency found a good property for them, but nevertheless requested time to think the purchase over.

The agency was determined to make a quick sale, however, and talked the family into signing a paper they thought was an expression of interest.

Such a document is the first step of buying a house in many countries, but was in fact an agreement to purchase; as is Belgian custom.

And the property also turned out to be in a different commune than advertised, which made a big difference to its value. The agency pushed the sale, but the family refused.

The agency subsequently demanded EUR 50,000 payment at threat of legal action. The case ended up in court and finally, the tribunal court.

The family’s lawyer was informed that the agency was prepared to drop the issue if it received EUR 5,000.

The family later found out that the original owner of the house had sold the property through another agent two weeks after they had been tricked in to signing the contract.

It is stories such as these that are a reinforcing caveat.

To rent or buy?

While property prices are still low in Belgium compared with many other countries, rental prices can be even lower.

So, before buying, it is worthwhile calculating carefully whether you would actually be better off renting than buying.

22 February 2006

[Copyright Expatica 2006]

Subject: Buying a house in Belgium, living in Belgium