Brussels' energy performance rules are pushing many homeowners to sell properties that need renovation, even if it means a lower price.
According to an analysis by Immoweb, the property finder platform, an apartment in need of renovation is listed for 24% lower than one in 'excellent' condition, and 20% lower than one in 'good' condition - the most common condition on their platform.
According to Jonathan Frisch, chief economist at Immoweb, the condition of the property is the key factor in this difference, as the more work is required, the lower the advertised price of the property.
“With the tightening of energy performance requirements, many older properties now require significant work before they can meet the standards," Frisch explained. "Some sellers prefer to sell their house as it stands, accepting a lower price.”
In 2022, the Brussels regional government introduced a 'correction factor' which limited rent increases for properties at the lower end of the Energy Performance Certificate (EPC) scale to improve the energy efficiency of Brussels' housing stock amid rampant increases in energy prices linked to Russia's invasion of Ukraine.
At the time, regional figures showed that 30% of Brussels tenants lived in properties with the worst energy efficiency rating, a G certificate, 15% with an E certificate, and 20% with a D certificate.
Since then, the region has introduced stronger energy-efficiency regulations that require renovation of all properties with the lowest EPC scores of F and G, to bring them up to a higher standard by 2033.
So far this year, 6.7% of flats listed for sale in Brussels need renovation work, with their advertised price around a fifth lower than properties in better condition, according to Immoweb's analysis.
Brussels is the only region to have seen an increase in the number of for-sale properties needing renovation since 2010. Across Belgium as a whole, the average figure has remained stable over the last 16 years, with around 3% of flats needing renovation work.
The share of advertised properties in Brussels that need renovation is also more than double that in Flanders (2.5%) and Wallonia (2.4%), pulling the Belgium-wide figure up to 3.5%.
Brussels has a unique property market compared to the rest of Belgium, with a higher share of apartments compared to houses.
Around 70% of dwellings in the region are apartments and only 30% houses, the opposite of the situation in Flanders and Wallonia. Additionally, more people rent, with only 20% of properties owner-occupied in Brussels.
These market dynamics may partly explain the higher levels of properties in need of renovation as landlords look to sell rather than invest.
While apartment prices have been rising, Kristophe Thijs, a spokesperson for the Confederation of Real Estate Professionals (CIB), told The Brussels Times in September that investors and landlords were pulling back from the market because of broader rent regulation in the region.
Beyond apartments, Brussels also has the highest share of houses for sale that need renovation. Just over one in five (20.6%) houses for sale need renovation, above Wallonia (19.4%) and Flanders (17.3%).
