Why we need rental flats
The Belgian real estate market is feeling it everywhere: the demand for rental flats is on the rise. Why is that? We’ve listed several factors below.
The most logical factor influencing the demand for residential property is our population. Like almost everywhere else in the world, Belgium’s population is growing year on year. The COVID-19 pandemic put the brakes on that growth for a while, but now positive figures have been published again in the same trend as before the crisis. In June, it was announced that our population had grown by 0.54% in one year. As a result, some 30,000 extra homes are needed every year.
In addition, we are increasingly dealing with the fragmentation of families. This means that there are more and smaller families, and therefore also more and smaller households that are each looking for a separate home. Our society encourages individualisation, with more singles as a result. Couples more often choose to remain childless or have a small family with only one or two kids. They focus on their careers or seek out as many experiences around the world as possible.
That brings us to the ‘flexi lifestyle‘. Travel and job-hopping are more popular than ever. We love self-development and discovery. We generally like to expand our horizons, where it used to be normal to stay under the church tower. Globalisation and modernisation are among the drivers of this trend – which has been going on for longer than today. Post-covid, we are once again yearning for it. We have become less fixed in our homes and renting fits in better with such a flexible lifestyle. Or should we call that trend ‘fear of commitment’?
Not only young people, but also elderly are asking for flats. Due to the longer average lifespan, we have been dealing with an ageing population for some time now. Older people are returning to smaller, collective housing or otherwise.
All these demographic factors are at the root of the demand for more and smaller homes. And what could be more suitable than (high-rise) apartment buildings to meet this demand? This way, a larger supply can be created on a small area – because yes, our space is limited.
Furthermore, we are all suffering from the ongoing COVID-19 pandemic and war, which is leading to a notorious inflation. This results in rising mortgage interest rates on the demand side, but also rising construction costs and a rising cost of living in general. As a result, housing becomes unaffordable for a certain segment of the population in no time and they are almost forced to rent.
On the purchasing side, residential real estate is proving to be an interesting investment product due to persistently low interest rates (even though they’re on a rise now), making it no longer interesting to keep your money in your account. The COVID-19 crisis has also shown that residential real estate is the least affected by economic crises. We all have to live, regardless of the situation.
A shift to the rental market therefore no longer seems illogical. For investors, it creates security of return as selling is becoming increasingly difficult, and for those with less purchasing power, it offers an affordable solution to a basic need.
CDC Design is the ideal partner for developers to design rental flats attractively and for every budget, with a view to a better return on their property.
(Sources: VRT News, De Tijd, Real Estape)