- Immo Deprez
- Zwijnlandstraat 6
- 8640 Vleteren
1. Low interest rates push up real estate prices
A low interest rate makes it possible to borrow cheaply. In the short term, it allows a buyer to borrow more (loan capacity, i.e. the amount that a buyer can borrow to buy a home in relation to his income) increases. Competition among buyers means that all buyers can pay more, which drives up prices. In addition, investors receive less when they invest in fixed-income investments such as bonds, savings certificates, .... They therefore often opt to invest in real estate that they rent out ... More demand for real estate means higher prices. The interest rate is determined by the European central bank.
2. The limitation of the supply of building land by the Flemish Government pushes up the price The Flanders Spatial Policy Plan aims to make it impossible to use new space from 2040. Even now, the construction of houses, certainly with a (large) garden, is strongly restricted by the regional plans and the Spatial Structure Plans for Flanders. A slightly increasing population and family dilution lead to a greater demand for housing. The restriction of the supply of building land in combination with higher demand leads to higher prices for the land and the houses. The living space is limited. The governor of the Belgian National Bank estimated that the lack of buildingplots caused 70% of the increase in house prices. (interview in De Tijd of 26th of february).
3. The stricter energy standards imposed by the European governments and the Flemish Government lead to higher costs for building and renovating homes. On a regular basis, the requirements imposed by the Flemish Government for the renovation are becoming increasingly strict and expensive. Requirements are imposed for roof and wall insulation, joinery, heating installation with expensive systems such as cogeneration, ventilation, solar water heaters, solar panels and energy studies. These heavy investments are only partially offset by a lower energy bill and subsidies (read higher taxes) and lower property tax. The maintenance costs (replacement of pumps) and electricity costs of heat pumps and ventilation must also be taken into account.
4. The rising costs of the electricity bill
With the liberalization of the electricity market, we were promised lower electricity prices. According to the Vreg, the electricity price for an average family (3500 Kwh / year with a dual tariff) increased by 33.51% between January 2015 and October 2020. According to the Vreg, the cheaper nightly rate would be abolished on July 1, 2022. The electricity bill consists of 28% network costs, 32% all kinds of levies (thirteen in Flanders), 17% VAT and 23% electricity (source CREG). In the meantime, the federal government promises massive investments in gas-fired power stations, wind energy and solar panels (read higher levies and / or taxes) and the closure of all nuclear power plants. Combine this with a mandatory reduction in CO2 emissions imposed by the European government (with penalty levies or purchase of emission rights abroad) and increased electricity consumption for charging electric cars and cogeneration and ventilation. Scarcity, purchasing electricity abroad (wind energy, nuclear and lignite) and higher prices seem to be the logical consequence .... Recently my monthly invoice was raised from 130€ to 331€ a month.
5. The levies on the water
The largest part of the bill for water consists of the levy for the discharge of the water and the purification of the waste water imposed by the Flemish Environment Agency.
6. The Keizer Koster mentality of the Flemish Government
The Flemish Government has the irrepressible tendency to impose more and more requirements and regulations, which leads to heavy procedures, additional costs (architects, specialists, purchase of authentic obsolete materials and techniques, remediation costs, fake increases of the energy score for heating with elektricity or unheated rooms,.....) and more expensive living. The many "special areas" or protected properties with additional requirements to (re) build entail additional costs. Think of the houses recognized as protected heritage, protected monument or located in a protected landscape and town or village, the levies that are imposed to build in certain areas, the building ban in certain areas, the requirements imposed on parciers, the asbestos regulations and the asbestos certificate compulsary from the 22th of novembre, the regulations regarding waste materials, the soil remediation decree, ..... The list is endless and gets longer every year.
7. House for rent with compulsory comfort .....
Landlords are forced by the Flemish quality requirements for a rental home to ensure that the rented home offers sufficient comfort and is safe. This requires additional investment. An acceptable home with little comfort may no longer be rented out. The landlord is forced to keep making new investments, which he in turn tries to pass on to the tenant. The right to housing is threatened for tenants in the lowest income class because they can no longer find affordable housing. After all, social housing (read subsidized housing) is only available to a limited extent. “Social housing units” are coming onto the market with prices that can be as high as € 250,000.
8. The abolition of the housing bonus
In recent years, the amount of loan repayment that could be deducted from income has been progressively scaled back for the first home. Last year, this scheme for main residence was abolished in Flanders. Over the duration of the loan, this could lead to a higher tax payable of more than € 30,000 for a couple with children in 20 years' time. Recently, the Flemish government approved a measure that additionally reduced the registration fees for the purchase of the first single owner-occupied home from 6% to 3%. All notarial deeds that are executed from 01.01.2022 are covered by the measure.
9. The obsession with clean soil.
The Public Waste Agency of Flanders deserves special mention. Soil surveys and remediation have brought significant and sometimes astronomical costs for some owners. The bill was mitigated for some owners through the intervention of Promaz. Other properties have become permanently unsaleable due to the high costs involved in remediation. A newcomer is the costs for archaeological research that is imposed on some construction projects.
10. Where is the limit?
At the beginning of 2020, the National Bank imposed on the banks the obligation for most mortgage loans to have a coverage ratio (i.e. the percentage of the value of the home that can be borrowed) of no more than 80%. As a result, some buyers can no longer take out a mortgage loan because they have insufficient own resources and are therefore forced to rent. The age at which a couple's first home was purchased in 2007 was 31 years. At the end of 2019, this had already increased to 36 years. For singles this had risen from 34 to 37 years. (source Immotheker-Finotheker) According to the notaries the average age of a buyer was all ready 42 years. No exact figures are available for the number of homeless people in Flanders. The governor of the National Bank, sir Pierre Wunsch, estimated that the lack of building plots ammounted for 70% of the rice in home prices (interview of 26 february 2022 in De Tijd).
We do speak English
On parle le français