House prices in Belgium are expected to increase by an average of 3% in 2025 and by 3.8% in 2026, according to the latest real estate barometer published by ING Bank. When adjusted for
inflation, these increases translate to 0.9% and 1.8%, respectively. The number of real estate transactions is also anticipated to rise as buyers recognize that interest rates are unlikely to decrease further.
While more than half of Belgians believe housing has already become unaffordable, this sentiment is notably stronger among older generations than younger people. However, ING economists highlight that falling mortgage rates this year have slightly improved housing affordability. "Lower rates mean potential buyers can now borrow more for the same monthly repayment," the report notes.
This improved affordability has already stimulated activity in the housing market, with a significant increase in transactions observed during the second quarter of 2024. ING predicts this upward trend will persist in 2025, particularly as hesitant buyers abandon their wait-and-see approach once they accept that interest rates will not return to pre-2022 levels. For 2025, ING forecasts a stabilization, or potentially a slight rise, in long-term interest rates.
Despite this, concerns surrounding housing affordability remain valid, ING economists caution. Alongside mortgage rates, government policies, such as the renovation obligation in Flanders, are also influencing the market. This measure has already widened the price gap between homes with high and low energy performance certificates (EPC).
While this price disparity is expected to persist, it may narrow somewhat after the planned abolition of the renovation obligation in Flanders, which is likely to boost demand for energy-inefficient homes. Additionally, the reduction in property registration fees, set for 2025, is expected to have a modest upward effect on house prices.
Overall, ING’s outlook suggests a combination of market forces and policy changes will drive moderate growth in house prices and transaction activity over the coming years.