Belgian housing market starts 2026 strong, but underlying dynamics soften
The desk highlights that while the Belgian housing market started 2026 strongly, characterized by a year-on-year price increase of 5.6% in 2025, the underlying dynamics are beginning to shift negatively. Per the full note from ing-think, factors such as a nearly 14% decline in transactions and rising mortgage rates are already indicating a cooling market. As long-term rates grew from 3.29% to 3.34% in the first quarter, this tightening in financing conditions is expected to lead to reduced demand for housing and more moderate price growth. Therefore, market watchers should prepare for potential shifts as the strength recorded at the beginning of the year is likely a lagging indicator of previous decisions.
What the desk is arguing
The thesis posits that the apparent strength in the Belgian housing market is temporary, with clear signs of softening demand emerging. Per the full note from ing-think, while the first quarter exhibited a 2.0% quarter-on-quarter price increase, a significant focus must be on declining transaction counts which are indicative of reduced consumer activity.
Moreover, the January-April shifts in mortgage types, with long-term fixed loans dropping from 68% to 59%, underline a notable change in borrowing patterns that points to a more cautious approach from potential buyers. Thus, the desk anticipates that this could lead to less aggressive price growth beyond Q1 2026.
Where it sits in our coverage
The consensus target for the EUR/USD is currently set at 1.075, with forecasts from select firms indicating a range of:
The desk's view aligns with the upper range of the consensus, especially considering jpmorgan's more bullish stance in light of potential short-term price stability that might be influenced by the Belgian housing dynamics.
How other firms see it
In general, firms like jpmorgan are aligned with the desk's view regarding a cautious outlook on housing dynamics contributing to currency valuations. Conversely, bofa holds a contrary position, suggesting a more bearish sentiment towards the EUR/USD pair.
Market watchers should pay attention to the EUR/USD trajectory in conjunction with the evolving dynamics of the Belgian housing market amidst broader ECB monetary policy shifts that could impact interest rates and purchasing behavior. More specifically, fluctuations in mortgage rates and transaction volumes will serve as critical indicators of demand within the housing sector.
How firms align with this view
Aligned with the desk view
Contrary positioning
Key takeaways
- 01The Belgian housing market is showing early 2026 strength but with signs of softening demand.
- 02Transaction volumes have declined nearly 14% quarter-on-quarter, indicating less activity.
- 03Rising mortgage rates show a shift towards a more cautious borrowing environment.
- 04Expect moderate price growth as demand decreases from Q2 2026 onward.
Market implications
Traders should be cautious of the EUR/USD as the outlook for the Belgian housing sector could influence broader movements in the market. Watch for transaction volumes and mortgage rates as indicators for pivot points in housing that may resonate through the currency pair.
Risks to this view
Should the housing market stabilize unexpectedly or see a rebound in transaction volumes, this could invalidate the desk's cautious outlook, leading to higher sustained price growth and an appreciation of the EUR/USD. A shift in ECB policy or a surprising decline in rates could also significantly alter expectations.
Articles Belgian housing market starts 2026 strong, but underlying dynamics soften 13:24 Belgium Share X LinkedIn E-mail Copy link Share X LinkedIn E-mail Copy link Download The Belgian housing market started 2026 on a strong footing due to lag effects from 2025, but underlying dynamics are weakening. Declining transactions, weaker mortgage demand and rising interest rates signal easing demand, reduced borrowing capacity and more moderate price growth ahead Alissa Lefebre Falling transactions, weaker mortgage activity and rising rates point to a cooling housing market in Belgium Early 2026 strength driven by lag effects, as demand and financing conditions weaken Following a strong 2025, with median prices for existing homes rising by 5.6% year-on-year, the first quarter of 2026 appeared robust. Prices increased by 2.0% compared to the previous quarter and were 2.4% higher than a year earlier.
This strength should, however, be interpreted with caution. Notary data reflect the moment when deeds are signed rather than when transactions are agreed upon. As deeds are typically executed within four months, part of the activity recorded in early 2026 still stems from decisions taken in 2025.
Looking ahead, we expect the underlying market dynamics to soften from the second quarter onwards. Initial signals are already visible. The number of transactions declined by nearly 14% compared to the previous quarter and was almost 5% lower than a year earlier, pointing to weaker demand.
At the same time, financing conditions have started to shift. According to the National Bank of Belgium, the average interest rate on mortgages with a fixed rate of at least 10 years edged up from 3.29% to 3.34% in the first quarter. Rates on variable loans declined slightly, resulting in a change in the composition of new lending.
The share of long fixed-rate loans fell from 68% in January to 59% in April, while shorter fixed-rate products gained some ground. More recently, upward pressure on long-term interest rates, partly linked to higher inflation expectations due to the Middle East war, has pushed mortgage rates higher. By April, the average rate for loans with a fixed rate of at least 10 years had increased to 3.41%, up from 2.95% a year earlier.
This rise has a tangible impact on borrowing capacity. For a monthly payment of €2,000 over 25 years, households can now borrow nearly €21,000 less than one year ago, narrowing the set of affordable properties and weighing on housing affordability. Housing affordability is closely linked to financing costs Source: NBB, calculations ING "> Source: NBB, calculations ING Mortgage activity signals cooling and points to more moderate price growth This shift is already visible in mortgage lending, often an early signal of where the housing market is heading.
In the first five months of 2026, the number of new mortgages was about 11% lower than a year earlier. Even if activity remains higher than in 2023 and 2024, the decline points to easing demand and more moderate price increases ahead. In that sense, recent developments point to a cooling of price momentum, with price growth expected to continue at a more moderate pace.
Median prices for existing homes are projected to increase by around 3.0% in 2026 and 2.5% in 2027, well below the strong growth recorded in 2025. Housing prices Housing market Housing affordability Belgium Content Disclaimer This publication has been prepared by ING solely for information purposes irrespective of a particular user's means, financial situation or investment objectives. The information does not constitute investment recommendation, and nor is it investment, legal or tax advice or an offer or solicitation to purchase or sell any financial instrument.
Read more Share X LinkedIn E-mail Copy link Share X LinkedIn E-mail Copy link Download Author Alissa Lefebre Economist Alissa is an economist at ING Belgium. She joined the firm in 2024 and covers the Belgian real estate and construction sector. Prior to this, she was a PhD student at KU Leuven.
In this article Early 2026 strength driven by lag effects, as demand and financing conditions weaken Mortgage activity signals cooling and points to more moderate price growth
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