Second-quarter resilience masks a more challenging outlook for Belgian housing
The desk projects a decline in demand for Belgian housing due to a significant decline in mortgage lending and persistent high interest rates, despite a surprising 2.4% growth in transactions during Q2 2026. Per the full note by ING Think, the modest quarterly price increase of 0.2% belies a tougher long-term outlook driven by restrictive financing conditions. Current indicators suggest that the resilience observed in the second quarter may not sustain, especially as heightened geopolitical tensions continue to exert upward pressure on rates. The prevailing sentiment aligns with a cautious view on the Belgian housing market, particularly with mortgage production decreasing by 10% compared to last year.
What the desk is arguing
The desk believes that the Belgian housing market, while currently exhibiting surprising resilience, faces a challenging future due to deteriorating lending conditions. Recent data indicates that mortgage production is 10% below last year's levels, which suggests a loss of upward momentum in the coming quarters, despite a slight quarterly price increase of 0.2% and strong growth in transactions .
Weak mortgage lending and high interest rates are expected to significantly dampen demand, making the current growth trajectory unsustainable. The roof on long-term interest rates, exacerbated by ongoing geopolitical unrest, implies that financing conditions will remain tight, which could further constrain the housing market’s recovery.
Where it sits in our coverage
The desk's outlook contrasts with the more bullish sentiment reflected by jpmorgan, which anticipates stronger recovery rates. However, the desk is aligned with bofa at the lower end of the targets, suggesting a more cautious view on price stability amidst deteriorating mortgage conditions.
How other firms see it
Firms like jpmorgan are more optimistic about the potential for sustained growth in the housing market, while bofa represents a more bearish stance given the recent trends in mortgage production and interest rates.
The state of mortgage rates and the trajectory of interest rates will be crucial indicators to monitor, especially in relation to the EUR/USD currency pair, as shifts in the Belgian housing market may impact broader economic conditions influencing the euro.
How firms align with this view
Aligned with the desk view
Contrary positioning
Key takeaways
- 01Belgian housing transactions increased by 2.4% in Q2 2026, but demand is expected to wane.
- 02Mortgage lending remains 10% below last year's levels, signaling future challenges.
- 03Higher interest rates and ongoing geopolitical tensions will likely keep financing conditions restrictive.
- 04Energy prices could affect home values, increasing demand for energy-efficient properties.
Market implications
Watch for any shifts in mortgage rates as they will be crucial in determining housing demand. If rates remain high or rise further, expect a significant slowdown in both transactions and price growth in the Belgian housing market, with immediate impacts likely reflected in the euro's strength against other currencies.
Risks to this view
A reversal in the current bearish outlook could occur if geopolitical tensions ease, causing interest rates to stabilize or decline. Additionally, a substantial decrease in energy prices may uplift housing market activities, providing an unexpected boost to demand.
Articles Second-quarter resilience masks a more challenging outlook for Belgian housing Published 14:04 Real estate Belgium Share X LinkedIn E-mail Copy link Share X LinkedIn E-mail Copy link Download The Belgian housing market remained more resilient than expected in the second quarter of 2026, with a modest increase in prices and a recovery in transactions. However, weaker mortgage production and higher interest rates suggest demand will lose momentum, while higher energy prices could increase the value premium for energy-efficient homes Alissa Lefebre Belgium’s housing market remained resilient in the second quarter, but weaker mortgage lending and higher interest rates point to slower growth ahead Housing market activity remains resilient, but momentum is likely to weaken Surprisingly, the Belgian housing market has so far remained relatively resilient amid tensions in the Middle East and the upward pressure they've applied on interest rates. Transactions increased by 2.4% in the second quarter compared with the previous quarter, although activity was still 4.1% lower than in the second quarter of 2025.
House prices also continued to rise, increasing by 0.2% quarter-on-quarter and by 5.3% year-on-year. The underlying picture, however, is less favourable. Mortgage lending remains weak, with the number of new mortgages in the first eight months of the year still around 10% below the level recorded a year earlier.
While the latest housing market figures have surprised on the upside, weaker mortgage activity suggests that momentum is likely to slow in the coming quarters. Higher interest rates point to a more challenging outlook Long-term interest rates have continued to rise since the start of the conflict in the Middle East – and as long as it persists, we see little room for a decline. This means that financing conditions are likely to remain restrictive.
A fall in energy prices is likely a necessary condition for long-term interest rates easing, although they are still expected to remain above their pre-conflict levels. While recent housing data has been more resilient than expected, the outlook remains thus challenging. Following three years of real house price declines between 2022 and 2024, 2025 marked a return to positive real price growth.
However, in the coming years, we expect the Belgian housing market to gradually cool again, with nominal median house prices increasing by 2.5% in 2026 and 2.0% in 2027. Higher energy prices could further widen the gap between efficient and inefficient homes The current environment could once again widen the price gap between energy-efficient and energy-intensive homes. As temperatures begin to fall and energy consumption rises, the financial benefits of energy-efficient housing are likely to become more visible again.
The energy crisis of 2022 has had a lasting impact on how Belgian households assess the value of their homes. Before the crisis, strong energy performance was often viewed as an additional selling point. Since then, soaring energy bills, alongside increasingly stringent renovation requirements, have highlighted the financial risks associated with poorly insulated properties.
Recent increases in energy prices further reinforce this trend. Higher energy costs improve the economics of investments in insulation, high-performance glazing and more efficient heating systems by shortening their payback periods. At the same time, stricter renovation standards are encouraging buyers to pay closer attention to future renovation costs when making purchasing decisions.
While we expect the Belgian housing market to lose some momentum in the coming quarters, demand for energy-efficient homes should remain relatively resilient. Energy efficiency is increasingly valued not only for its ability to reduce energy expenses, but also as a hedge against future energy price shocks and regulatory risks. As a result, energy performance is becoming an increasingly important determinant of both a property's value and its long-term marketability.
Real Estate Housing transactions Housing prices Housing market 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 Housing market activity remains resilient, but momentum is likely to weaken Higher interest rates point to a more challenging outlook Higher energy prices could further widen the gap between efficient and inefficient homes
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