Residential real estate price forecast change in Belgium 2019-2021

Housing prices in Belgium are expected to increase in 2020 due to the coronavirus, with a much larger decrease expected in 2021. For 2020, a house price decrease of three percent year-on-year is expected, which is a more positive outlook than in earlier months (when a correction in house prices of three percent y-o-y for 2020 was forecast). Consumers signal much uncertainty on, for example, unemployment in Belgium, which might hamper the housing market in 2021.

In sync: Belgium’s housing prices until COVID-19

For years, house prices in Belgium followed a similar growth pattern to the country’s economy. Residential property prices grew when Belgium's economy performed well but stagnated when the economy slowed down. Belgium's house price index grew by more than 3.5 percent year-on-year (or 2.7 percent when adjusted for inflation) in early 2020, a growth rate that was lower than in previous years. House prices in the three Belgian regions could vary, however. A house in Flanders (the Dutch-speaking region) cost around 277,000 euros in 2018, whereas a residential dwelling in Wallonia (the French-speaking part of the country) was priced at 189,000 euros. The Brussels-Capital Region (Brussels and its surrounding municipalities) was the most expensive: 452,700 euros on average.

The Belgian economy faces an uncertain future

Belgium’s real estate market is closely connected to the economic performance of the country. What are the predictions for Belgium’s economy for 2020? In the early weeks of COVID-19, Belgium’s four largest banks lowered their GDP outlooks for the rest of the year. According to a forecast from the European Commission in July 2020, the Belgian economy was predicted to decline by 8.75 percent in 2020, a figure that was slightly higher than real GDP losses predicted for other European countries. This prediction reflected supply chain disruptions impacting domestic demand, as well as (a lack of) international trade impacting Belgian growth.