Is it a good idea to invest in real estate right now?

In times of economic uncertainty and rising interest rates, real estate investors have adopted a wait-and-see approach in recent years. However, given the pressure on the current rental market and the growing focus on sustainability due to renovation requirements, there are still lucrative real estate opportunities available.

Investing in real estate offers security and a double return

Real estate remains a safe investment that offers peace of mind, especially when compared to the risky and volatile stock market. According to the Immoweb Price Index, real estate prices in Belgium have risen by 28% over the past ten years. Although massive capital gains upon sale may be a thing of the past, economists still predict steady growth in real estate prices, resulting in an annual capital gain of 3%. Moreover, real estate investors enjoy annual rental income, meaning their investment pays off twice over in the long run. Additionally, the federal housing bonus will be phased out starting in 2024. To take advantage of tax benefits when purchasing a second home or investment property, it is advantageous for potential buyers to invest in real estate this year.

Rents continue to rise

There has been a shortage in the rental market for several years now. Demand for high-quality, sustainable rental housing is currently higher than ever before. Due to rising interest rates and real estate prices, people often no longer have the means to buy a home themselves, causing them to remain in the rental market longer. Because the significant demand for rental homes exceeds supply, rental prices in the market are rising. That is why there is a great need for investors in high-quality rental homes.

Buy a new home and avoid the renovation requirement

With the introduction of the renovation requirement, current and future property owners and investors will face significant costs. Energy performance certificate (EPC) ratings must be improved, which means that all homes and apartments sold starting in 2023 must be renovated to meet energy label D within five years. And that’s just the first step!

To invest safely and avoid facing high and sometimes unexpected renovation costs, it makes sense to opt for new construction now. Regulations and standards regarding sustainability are already much stricter for new construction projects. This means investors won’t have to worry about additional renovation costs for years to come, while their energy-efficient home remains highly sought-after in the rental market.

Source: Immoweb