Cost of living and rents in Belgium continues to rise
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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.
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 not 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.
