Houses in Brussels [Photo credits to Eric Wilcox on Flickr]
Writing the day after the biggest fall in the stock market since the outbreak of the Second Gulf War, a fall that’s related to property investment problems in the US, it’s reassuring to be looking at one real estate market that’s heavily influenced by the pay packets of civil servants.
For some time there has been speculation that the big enlargement of the EU in 2004 and the addition of Bulgaria and Romania at the beginning of 2007 will lead firstly to a big increase in EU bureaucrats and lobbyists from the new member states of Eastern Europe and that this influx would impart new vigour to the Brussels residential market, particularly in the European Union quarter.
The speculation appears to have been correct with the Irish Times reporting last month an acceleration in property price rises over the last four years. The impact of the EU on the market is slightly complicated by the location of the EU institutions in close proximity to some of the pleasantest (and most prosperous) parts of the city, with the Parc Cinquantenaire and the Bois de la Cambre conveniently close.
Facilities for foreigners, such as international schools, have long had the critical mass to attract diplomats and staff at NATO and the EU Commission. Residential property prices in the more expensive areas of the city are in the 3,500 to 4,500 euros range. For example, Leopold Village apartments (close to the park of the same name) are being marketed at 172,000 euros for a 39 sq metre apartment.
However, Expatica instanced the sale of a one-bedroom apartment, also near the European Parliament for 333,000 euros a year ago. Purchasers benefit from the euro zones relatively low interest rates with rates for variable and new 10-year fixed rate mortgages at around 4.5%.
Rental yields on new properties tend to be in the region of 5 to 6%. For information on buy-to-let in the city you could visit www.brusselsbuytolet.com to buy their guide. Alternatively, the Young Urban Property site may be worth a visit. Some 60% of Brussels households rent but the trend is down.
As for the significance of citizens of the accession states coming to work in the city, the picture is somewhat mixed. Brussels is not only the cheapest Western European capital city in terms of purchase prices, it is also cheaper than some Eastern European Cities (Prague, Zagreb, Tallinn and Vilnius, for example). With the possible exception of Prague, the property prices in these locations would seem to have a greater speculative component than Brussels. It represents a safe investment for East Europeans and investors from the UK also.
Given Brussels superb air and train connections to other parts of Europe and it’s own importance, political and commercial, it looks that Brussels has been somewhat overlooked. Perhaps the one off-putting factor is relatively high taxation and purchase costs.