Higher rents: news or lobbying?
Rental prices in Brussels and the rest of Belgium have rocketed in recent years, the real estate sector claimed on Wednesday. Several economists were quick to respond: inflation in recent years has been higher than the increase in rent, so renting - in real terms - has become cheaper. This doesn’t stop the real estate sector from demanding help from governments.
After the invasion of Ukraine, energy prices truly rocketed, causing inflation to jump. Energy prices later went down but inflation remains high, causing many sectors to charge higher prices for their goods or services.
Depending on the region, renting became 5 to 6 per cent more expensive last year, and some 10 to 15 per cent in the last two years, according to the sector. Is that a lot? Inflation last year was 2.3 per cent and 10.3 per cent in 2022.
The real estate sector admits a large part can be explained by higher inflation, but still points to a couple of problems. Most of them have to do with higher interest rates, which is caused by higher inflation.
Young people can’t afford to buy their own home because of high interest rates, so they stay in a rented property. On the other hand, investors are putting their money more into investments that profit from the higher interest rates, instead of real estate.
The sector therefore wants tax advantages to broaden the offer and lower the prices. Left-wing politicians plead for some sort of maximum for rents, but this will only reduce the offer even more, the sector says.
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