Housing market remains buoyant despite abolition of mortgage tax relief
According to figures from the region’s notaries, the housing market remains buoyant. During the first seven weeks of this year the number of property transactions was down around 3% on the same period last year. A much sharper fall was expected, given the abolition of mortgage tax relief at the start of the year. The announcement that the tax relief on mortgage interest was to be scrapped caused a rush of real estate transactions at the end of 2019. The notaries’ figures show that a large portion of those buying property are investors that are buying to rent.
Many of those that joined the rush to purchase real estate before the abolition of mortgage tax relief were first time buyers. During the last few month of 2019 the number of real estate transactions rose by over 20%. It had been expected that the number of transactions would fall drastically at the start of this year.
However, this doesn’t appear to be the case. On average the number of transactions during the first seven weeks of 2020 is down just 3% on the same period last year. Last week the year-on-year fall was smaller still at just 0.9%.
It is also clear that some people have waited to buy a house or flat. However, the profile of those purchasing real estate during the first weeks of this year is different to that of those purchasing property during the closing stages of 2019.
Bart Van Opstal of the Royal Federation of Belgian Notaries told VRT News that “A lot of people are looking for an investment to rent out. These people kept their cool at the end of last year because mortgage tax relief didn’t play a role for them. Now at the start of this year they have become a lot more active and this explains why the fall is less pronounced that had been predicted”.
Mr Van Opstal adds that those buying property as an investment have benefit from the slowing down of the market since the abolition of mortgage tax relief in Flanders. This has made it more possible to negotiate with vendors on the price of the property.
Bart Van Opstal expects the trend to continue
“We have the results for the first six weeks of the year and it appears that the fall in the number of transactions for each week is very limited. So it would appear that this is a trend”.