July 12, 2024

Taylor Daily Press

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Housing sector bleak due to sluggish housing market |  Economy

Housing sector bleak due to sluggish housing market | Economy

A trade survey conducted by the Belgian construction industry association Embild showed that companies active in new home construction and home renovation are in a gloomy mood. Nearly two-thirds of homebuilders (63%) also expect 2024 to be worse, leading to lower investment, activity and profitability. For companies that renovate homes, this represents just under half (46 percent).

EmBuild, the former construction union, represents more than 16,000 construction companies. 427 construction companies participated in his business survey.

Among construction and installation companies, 52% say their order book is currently less full than usual, and 62% have noticed a reduction in the number of calls for new contracts. By 2024, 57% of home builders expect employment to decline, while this figure is 45% for home renovators.

The housing market has reached a standstill

The reason behind all this, according to Embild, is not beyond research. Mortgage interest rates are said to have tripled in one year, bringing the housing market to a halt in recent months. Rising material prices and staff shortages have also had an impact. “As a result, building or renovating has become more expensive for many households: more than 9 in 10 construction and installation companies have noted that their clients now find it more difficult to obtain a loan.”

Embild CEO Nico Demeester believes that “waiting for a new price equilibrium in the housing market”, further increases in costs for individuals should be avoided. He therefore reiterates his call to maintain the reduced value-added tax on demolition and reconstruction operations (from 21 to 6 percent) after 2023.

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Demeester supports Open Vld’s request to permanently adopt the reduced VAT in the context of the ongoing budget negotiations in the Federal Government.