Is Brussels a boring market?
Real Estate’s no longer just about location and price, but also connectivity and digital infrastructure. Boundaries between sectors are disappearing, with mixed-use properties becoming more the norm.
The Brussels Real Estate market isn’t prone to dramatic swings that make headlines. It’s no mega-market like London, Paris or even Amsterdam. Brussels is the strong and silent type: its strength lies in its stability over time.
Its resilience was evident during the financial crises of the last decades. Belgium was largely spared from the plummeting Real Estate prices from which other major European countries suffered and it enjoys reasonably stable rental prices.
The Brussels market may be boring, but it’s stable, making it a safe and reliable place to park an investment. There’s nothing boring about that.
Many people live too far from work. There’s a strong anti-urban mentality. For many Belgians, owning a detached house with some green space in the neighbourhood where they grew up is worth all those hours on the road.
Some investors find it difficult to get excited about the city of Brussels and according to the Urban Land Institute (ULI)’s 2019 survey, its lowly ranking has barely improved. Most concerns are around political instability and mobility issues.
According to a recent EU report, mobility in Belgium suffers from insufficient public investment in infrastructure, distortive tax incentives and lack of competition in transport services, causing major congestion and hindering productivity and growth.
Our complex political system is working largely to our detriment in terms of getting the different layers of power aligned on mobility issues, which are key to making sure that Brussels can keep up with succesful cities like Amsterdam and Vienna.
What business/social/political issues will most impact your business?
The strength of the Belgian Real Estate market lies within its relative stability
Overall, we remain optimistic about the prospects for Belgian Real Estate markets while being aware of potential risks. Lower interest rates, together with lower levels of debt financing and lower property supplies in most markets worldwide will temper the effects of a slowdown.
The Logistics and Retail sectors will continue to experience significant structural changes due to increased online sales. The approach to Retail is very cautious.
Office space is more stable, but still subject to structural changes due to flexible working technologies, different tax regimes and mobility issues.
Real Estate’s no longer just about location and price, but also connectivity and digital infrastructure. Boundaries between sectors are disappearing, with mixed-use properties becoming more the norm. Obsolescence is a growing concern for asset owners globally, against a backdrop of rapid changes in technology, demography and social norms. New generations are becoming workers and consumers, and different social values and choices are influencing how people live, work and play. As a result, in order to remain relevant, Real Estate will need to provide amenities and experiences that the ultimate end user wants.
Authors of this article
Real Estate Country Leader - PwC Belgium
ULI Belgium Chairman - Urban Land Institute
Alain Van Houtte
Director - PwC Belgium
Director - PwC Belgium