For several decades, residential real estate prices have been steadily increasing in Europe and Belgium. In the 1980s-2000s, this growth was very strong, with an annual rate of around 10%. Furthermore, this growth was coupled with inflation, which was around 7 to 8% per year. Since 2005, we have observed a significant flattening of the real estate price curve and even a drop in prices in the first quarter of 2014.
Moreover, inflation remains very low in Europe, around 2% per year, and interest rates are also very low. All the conditions are therefore in place to consider that we are experiencing a favorable moment to consider a real estate purchase and a credit in Belgium.
All the technical explanations summarized in a few key ideas in our article.
The housing price index is falling in Europe and Belgium
The housing price index measures inflation in the private property market. This index tracks price changes of new or existing residential properties bought by households, regardless of the purpose (rental or personal occupancy).
The Belgian housing price index fell by 1.6% in the first quarter of 2014 compared to the previous quarter. The annual inflation rate stands at -1.1%. The average inflation was 1.2% in 2013.
The housing price index for the eurozone and the European Union for the first quarter of 2014 will be published by Eurostat on July 10, 2014. In 2013, the average annual inflation rate reached -1.9% in the eurozone and -0.9% in the European Union. More information on the housing price index
Evolution of real estate prices in Belgium
By analyzing the evolution of price curves of houses, apartments, and villas in Belgium, we observe a significant flattening of the curve since 2010.
It seems that the era of constant real estate price increases is behind us.
This is good news for prospective buyers and borrowers.
However, investors may need to start reviewing their strategy if they want to keep in mind that the cost evolution curves continue to rise. Real estate remains an investment that generates net gains but much less significant than in the past.
Evolution of interest rates
The level of mortgage rates is actually linked to the bond rates in the financial markets, which vary daily. When bond rates fall, mortgage rates also fall, as credit institutions simply follow the market.
In simple terms, bond rates generally move in the same direction as stock markets.
In recent years, and following financial crises, investors have opted for safer financial products such as bonds. As a result, their returns have significantly decreased along with interest rates.
We are going through a period where interest rates are historically low: at Crédit Populaire, we can guarantee you a rate of 3.5% over a period of 20 years (fixed rate).
Use our fee calculators
When you make a real estate purchase, you should not overlook the ancillary costs that are added to the purchase price. These costs are essentially of two types.
- Credit act fees: everything you need to know and our fee calculation simulator
- Sale act fees: everything you need to know and our sale fee calculation simulator
Our simulators allow you to have a very precise overview of the fees that will affect your purchase: it’s a very practical tool.
Our mortgage loan specialist
Ms. Jacqueline Legrand will be your personal advisor for your purchase: Jacqueline has been managing mortgage loans for over 30 years, she is a key player in this market and guarantees to find the interest rate and loan formula that best suits your needs.
Contact: Ms. Jacqueline Legrand: phone: 04/387.73.78 – Mobile: 0486/77.66.97
Visit our website: www.cpe-credit.com
