Rents have experienced a notable increase in Belgium over the past decade, rising by approximately 23%, as reported by Statbel, the Belgian statistical office.
This surge is in tandem with the general trend of rising living costs during this period, driven partly by the indexation mechanism stipulated in Belgian law.
During the same timeframe, the consumer price index saw an almost 28% uptick. Statbel points out an inherent discrepancy between the two trends, often stemming from landlords implementing indexation when a lease ends.
Furthermore, between October 2022 and 2023, the three regions decided to halt the indexation of properties based on the energy performance of buildings (EPB), mainly due to the surge in energy prices. Measures have been implemented to prevent landlords from recouping this "pause" in the following year.
It's worth noting that the rent increase is relatively less pronounced, structurally speaking (occurring over several decades), compared to the surge in real estate values. To put it differently, rent prices have risen less than the prices of houses and apartments.
From a macroeconomic standpoint, Belgium has n0t witnessed an "explosion" in rent prices in recent years. Nonetheless, this doesn't alleviate the financial strain experienced by tenant households, who are grappling with rising overall daily expenses, especially when transitioning to a new property after a long tenancy.
The challenging state of public housing stock in Belgium is a significant concern. These macroeconomic trends are an average representation, concealing individual hardships. Income disparities are increasing, making it challenging for many to secure suitable housing, not necessarily because of high rent prices, but due to insufficient income.
However, the primary rental market, largely comprised of private landlords, is ill-equipped to address these needs. This problem arises because it's driven by profitability considerations. The growing disconnect between the acquisition and rental values exerts pressure on rental returns and diminishes the attractiveness of investing in this sector.
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At Fédéria, a federation of real estate agents focusing on the evolution of the rental market, but exclusively on new contracts, concerns are mounting. Tightened credit conditions have led to a lag in supply compared to the demand, resulting in price inflation. Families in need of three-bedroom accommodations often find themselves settling for smaller apartments. It's evident to experts like those at Fédéria that accessibility to decent housing is becoming a pressing issue.
Conversely, authorities possess potential means of addressing this situation. Developing the public housing stock, particularly in the realm of social housing, offers a solution that transcends market-driven logic. However, many experts say that Belgium, on the whole, lags behind in this regard.
