The European Central Bank has finally cut interest rates again. The interest rate was lowered by 25 basis points. “We’ve had to exercise patience,” says Stijn Paredis, an investment expert at Antonissen. “In the past two years especially, we have seen successive interest rate hikes, which has put pressure on the property market. The higher interest rates made home loans more expensive, which in turn made it harder for prospective buyers to get a loan.
Property developers also faced higher credit risks, which in turn also drove up construction costs. It is hoped that the cut in interest rates will stimulate economic growth. Interest rates on home loans have already fallen somewhat and will now be able to drop further, which could serve as a stimulus for the property market.
The rate cut is good news for anyone considering buying a house with a loan. However, for cautious investors, this means they have fewer options. “They will have to think about alternatives to their traditional way of investing. The government bond which the Belgian government issued in 2023 was a huge success for investors who like to play it safe. It also meant that people took a lot of money out of their savings accounts.” In September, the investment period of this government bond will come to an end and all this capital will be freed up again. “The government will make new offers to investors and banks will also try to recover some of the money. However, the interest rate cut means the interest rates on safe moveable investments will also drop, making the new products unappealing. This leaves investors with two options: the volatile stock market, which is likely to be more of a risk after a very good year, or investing in property. We all know that housing prices will not drop in the near future. Now that loans are becoming more accessible again, there’s no need to put off your plans to buy property.”
You don’t necessarily need a lot of money to invest in property. “Property can also be an interesting investment for smaller investors. Consider investing in student housing or parking spaces. With these smaller property developments, you can expect a strong net return on your investment that is similar to that of the current government bond and definitely better than your future alternative. Real estate is also inflation-proof and offers great potential in terms of value added, so it always yields a better return on your investment.” And yet many Belgians continue to believe in putting their money into a savings account. “Many people thing of savings accounts as a kind of investment even though you lose money because of inflation. Your purchasing power decreases daily in a savings account.” Stijn has a last, valuable tip for anyone who is hesitant to begin investing in property. “Be well-informed so you can take a strategic approach. Our experts are at your service and happy to assist you with this. After all, a goal without a plan is nothing but a dream.
Interested in the various options for investing in real estate with Antonissen? Our financial experts are happy to offer custom, no-obligation advice.
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