Mortgage misery: Belgian home loans hit record lows

Mortgage misery: Belgian home loans hit record lows
Credit: Belga / Kurt Desplenter

Mortgage loans in Belgium have hit record lows as rising interest rates and soaring inflation have made house purchases increasingly unaffordable for the vast majority of Belgians, l'Echo and De Tijd report.

According to figures recently published by the National Bank of Belgium (BNB), 16,165 new mortgages were issued in Belgium last month: the lowest number since the BNB began collecting data in 2007.

The study also found that 32,600 mortgages were granted over the first two months of this year: less than half the number issued over the same period in 2022. Mortgage applications were also down: excluding refinancings, applications fell 20-40% relative to the long-term average.

"The higher interest rates weigh on people's borrowing capacity," said John Romain of Immotheker Finotheker, a mortgage advisory firm. "In combination with an uncertain economic climate, this leads to a standstill in demand, while the price rearrangement of supply is yet to come."

Widespread pessimism

The BNB study follows a related survey, which found that Belgians are becoming increasingly pessimistic about the prospect of one day owning their own home.

The study, which was reported on by La Dernière Heure, found that 65.1% of Belgian non-homeowners believe that they will never be able to afford a house, up from 63.7% last year. It also noted that more than seven in ten Belgians (71.3%) believe that purchasing a home is inconceivable without financial help from their parents or other family members.

Unfortunately, such economic pessimism appears to be growing entrenched in Belgian society. According to the latest annual edition of the Testachats Index, which measures Belgians' consumption and saving habits, in 2022 more than half of all Belgians (53.3%) reported having some financial difficulties — a 4.3 percentage point increase compared to 2021.

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The study also found that almost two-thirds (65.7%) of Belgians claimed they are unable to save any money at all at the end of each month (up from 58% in 2021). Just 14.3% stated that they are able to save money without too much difficulty (down from 21.7% in 2021).

Testachats further noted that Belgians do not expect their financial predicament to improve over the coming months: "50.2% of our sample fear a deterioration in their situation in the coming months, 41.6% think it will be the same and only 8.2% that it will be better," Sebastian Stevering, a project manager at Testachats, told Le Soir.

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