The Real Estate Market In Belgium: A 2022 Guide For Foreign Investors

• Published date: 24 May 2022
• Subject Matter: Government, Public Sector, International Law, Real Estate and Construction, Inward/ Foreign Investment, International Trade & Investment, Real Estate
• Law Firm: Innovation Park
• Author: Ms Julia Vorontsova

Market trends. Property taxes. Inflation rates. Registration fees. These are just some aspects affecting property portfolios. As a foreign investor, buying real estate in Belgium may be a viable way to diversify your portfolio.

But is it a profitable one, especially in the post-pandemic landscape?

Business confidence in Europe's real estate sector is at its highest since 2014. Property remains a favored asset class, forecast returns are higher than last year, and investor demand remains high.

Is the same true for Belgium's real estate market, though?

And if so, how do you go about buying Belgian property? What about taxes and registration fees? Are there exemptions?

We answer all these questions and more below.

Europe's Real Estate Sector at a Glance

Macroeconomic trends and challenges ultimately affect commercial property and housing prices in Belgium. That's why it's vital to understand the European Union economy and property market.

Europe's real estate sector saw remarkable resiliency in the last two years, in large part due to governmental and central bank support measures. As such, sentiment and profitability expectations have recovered to pre-pandemic levels.

Expected Growth Despite Long-Term Uncertainty

According to the Urban Land Institute's and PWC's Emerging Trends in Real Estate' Europe 2022 survey, industry leaders predict relatively strong growth for 2022.

This comes despite long-term uncertainty amid the potential effects of rising inflation, supply chain disruptions, and structural transformation. In fact, cybersecurity ranked as the top long-term concern among respondents-before inflation, interest rate movements, and business interruption, respectively.

Short-Term Industry Concerns

Still, the pandemic's impact on labor mobility and supply chain bottlenecks has resulted in rising construction costs-the primary short-term concern among the surveyed industry professionals.

The availability of suitable assets and land for acquisition and development ranked second. Sustainability and decarbonization requirements ranked third amid rising energy costs and the acceleration of environmental, social, and governance (ESG) issues.

Socio-Political Issues

It's no surprise that environmental sustainability will become a price-determining factor. Socio-political issues concerning the environment, housing affordability, and social equity/inequality were the top three concerns in the category among respondents.

Property Trends: Residential is In-Office is Out

Some subsectors are expected to perform better than others, with residential and logistics properties finding favor among investors.

While operational real estate income profiles and alternatives like data centers, life sciences, and new energy infrastructures are appealing, they won't attract the most capital this year.

These sectors don't currently offer the liquidity most investors require. Rather, they represent a more long-term fundamental shift towards operational real estate.

Unsurprisingly, asset allocations in the...