The number of borrowers investing into second homes has hit record levels in 2021. According to the BNP Paribas Fortis’ barometer of second residences, up to 28% of mortgage loans issued by the bank are now for second homes. Just five years ago, this statistic was 20%.
The study by the bank gives an interesting insight into the profile of the Belgian property investor. The average age of those borrowing to get a second home was 44 years old and 62% had invested into a second home to earn additional rental income.
Investing in a second home is being seen as a financial decision by more and more households, and the share of people buying second homes for recreation has shrunk significantly. The majority (77%) of Belgians taking out loans for second homes purely for recreation tend to be over 50.
The vast majority of mortgages related to homes (62%), while apartments account for 27%, and land and car-parks 11%. Borrowers paid an average of 1,038 per month in mortgage payments over an average credit period of 199 months.
On average, investors into second homes took out loans of 221,000, a figure that is rising each year with house prices. Those buying their homes for leisure purposes tended to borrow around 9,000 less than those for rental.
Investments are pouring into surprising parts of the country. Most notably, loans for properties on the Belgian coast and the Ardennes remain a small fragment of second home mortgages. In 2021, just 4% loans went to the Belgian coast, compared to 8% in 2020. Likewise, only 1.3% of the second home loans went to properties in the Ardennes.
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The most popular seaside locations for investors are Knokke-Heist (23%), Ostend (21%), and Koksijde (8%). In the Ardennes, Verviers (10%), Bastogne (7%), and Spa (5%) were the most popular. 60% of properties purchased in the Ardennes ultimately went for rental, while 70% on the coast are used purely for recreation.
Young people, the data shows, have been completely side-lined from the Belgian second home market. Second home loans account for the under 35s account for just 1%, down from 20% in 2020.
According to statistics published by the National Bank of Belgium, some 72% of Belgian households own their own homes, and 18% of Belgian households own a secondary property. The median value of these secondary properties is 296,000, 5% more than in 2017.