WHY INVESTING IN NEW CONSTRUCTION STILL PAYS OFF
Uncertain economic times and rising interest rates have led to property investors adopting a wait-and-see attitude in recent years. However, with the current rental market under pressure and the renovation obligation making sustainability more important than ever, there are still opportunities for investing in real estate.
INVESTING IN REAL ESTATE PROVIDES SECURITY AND HAS TWOFOLD BENEFIT
Real estate is, and will remain, a safe investment. This security brings with it a lot of peace of mind, especially compared to, for example, the risky and fluctuating stock market. According to Immoweb’s price index, Belgian property prices have risen by 28% over the past ten years. Although such huge capital gains on sale may be a thing of the past, economists still predict steady growth in property prices and an annual capital gain of 3%. In addition to this annual capital gain, property investors, in the meantime, enjoy annual rental yield. At the end of the day, this means a property investment has twofold benefit!
Let’s not forget: The federal housing bonus will be a thing of the past by 2024. Prospective buyers wishing to enjoy a tax benefit on a second residence or investment property still have this year to fully profit from financing investment real estate or a second home. > Read all about the federal housing bonus in this article
RENTAL PRICES CONTINUE TO RISE
The rental market has been experiencing shortages for several years now. However, the demand for high-quality and sustainable rental houses and flats has never been higher than it is at the moment. With increased interest rates and rising property prices, people are often no longer in a position to purchase themselves and are therefore remaining longer in the rental market. Given the current demand for rental properties far exceeds supply, market rentsare also rising . This means that there is certainly a need for investors in quality rental properties.
BUY NEW, AND AVOID RENOVATION OBLIGATION
Now that the renovation obligation is in place, lots of current and future property owners and investors will have to have deep pockets. With EPC ratings needing to be improved, all homes and flats sold from 2023 onwards will only have five years to renovate to energy label D. And that’s just the start of it!
If property investors want to play it safe and not face sky-high, occasionally unexpected, renovation costs, they should opt now for new construction. After all, sustainability regulations and standards for new construction projects have been much stricter for some time now. Investors won’t have to worry about additional renovation costs for many years, and their sustainable home will remain highly sought after on the rental market on account of its low energy consumption.