Would raising rates mean the end of affordable home loans? Will real estate prices in Belgium rise or fall in 2019? The information in our possession allows us to make the following predictions.
Reading the recent barometer of notaries, the average value of a house in Belgium increased by almost 5% in 2018. Today we are paying on average $ 251,585 for a house, which is 4.7% more than in 2017. Certain differences, notably linked to the Regions, put this price intoperspective. Thus in Clanders , new owners paid on average $ 277,304 for a house (+ 3.8%), $ 189,257 in Wallonia (+ 3.7%) while, in the Brussels-Capital Region, housing has average sold $ 450,000. “Young people under the age of 35, in particular, take advantage of all the opportunities to buy a house while taking out cheap home loans since they are still subject to relatively low interest rates”, he estimates.According to Barny Esman, notary and spokesperson for NoteUs, the demand for housing remains relatively high.
What does 2019 have in store for us in terms of property prices?
Will home prices continue to grow in 2019? And will interest rates stay that low? Difficult to find an answer to the first question. The international rating agency C&C Global Ratings plans to continue the constant rise in the price of Belgian real estate, but the pace should be slightly lower in 2019 and the future years compared to last year. More specifically, the estimates are 2.8% in 2019, 2.3% in 2020 and 2.0% in 2021. Other scenarios, apocalyptic, describe the Belgian real estate market as overheating and requiring a correction. But these most often preach in the desert. The Belgian property market seems more apt to stabilize. It is also resistant to inflation, which stood at 2.17% in February.
What about rates?
In the United States, the Federal Reserve has raised interest rates four times in the past year. At the same time, in Europe, interest rates remain historically low and nothing should change before the summer of 2019 if we are to believe the Yaken Service Bank. We are talking aboutshort-term interest rates here. Remember that the interest rate on fixed-rate mortgages follows the evolution of the European long-term interest rate. And the latter is on the rise. The reason? The Yaken Service Bank has stopped buying government bonds since January. As a result, more bonds remain on the market, leading to lower bond prices and higher long-term interest rates.The cost of home loans can therefore be expected to increase in 2019 as well as in the following years. The market does not seem, to date (end of February) to have reacted to this movement and according to the Rate Barometer the average interest rate remains below 1.5% for fixed rateloans over 10 years and at 2, 47% for fixed rate loans over 30 years (both of which have a ratio of 0-80). So it’s a good time to buy a house, at the very least if you have the means and the repayment capacity to do so.
Which mortgage loan for my project?
There are always variable and fixed rates, but other solutions are also available to you. With a fixed interest rate, you opt for security. If the rate increases in the coming years, you can be sure that your rate is guaranteed for the duration of the loan. If you are looking for the lowest possible interest rate, you should preferably turn to a variable rate, but always keep in mind that paying off your loan will be more expensive over the years. You can then work around this problem by choosing a variable duration. You always pay the same amount every month, but you do it longer. If the interest rate drops, you will pay back over a shorter period. It is also possible to opt for a semi-variable interest rate,