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Brussels property market: A port in the storm?

Friday, 11 February 2011 4:00 PM

Despite being regularly overlooked, Brussels is a stable property market in these unpredictable times and can represent a great investment option for buy-to-let or second-home ownership, writes Anthony Hill.
Unlike the vast majority of cities across Europe, the Brussels market has not been hit by the 'boom and bust' cycle of other property investment locations. While the rate of sales did slow down in the Belgian capital, prices did not plunge downwards like those in other major cities. In fact, property prices in Brussels only fell by one per cent during the economic downturn, while transactions continued steadily, though admittedly at a lesser pace.

In terms of Brussels as a potential market for Britain's property investors to consider, buy-to-let buildings tend to provide strong rental yields, making Belgium an increasingly popular choice among landlords across the whole of Europe. In 2006, UK developer Thornsett Group saw the city's potential and decided to launch Thornsett Belgium. Since then, the company has put its name to three separate developments in Brussels.

Commenting on the area's potential, Thornsett's commercial director in Brussels, Eoghan Quinn, said: "Property sales prices have risen five per cent in Belgium in the past 12 months and, coupled with the consistent market demand for places to rent and the multilingual character of the city, it is a perhaps easier and more stable place to invest than some other European cities."

Most recently, the company launched to market its Leopold Village – a mixed-use development comprising 108 contemporary studios, apartments and penthouses.

Leopold Village

"The investors who bought at Leopold Village have been seeing very good rental yields," Quinn added, explaining that a two-bedroom property bought for €330,000 (£280,000) would currently attract rates of around €1,700 a month, yielding 6.1 per cent.

"One-beds are renting for between €1,150 and €1,450 per month, giving rental yields of between 5.5 and 6 per cent," Quinn continued. Leopold Village is just a five-minute walk from the European Parliament and has convenient transport links to the Eurostar terminal and Brussels International Airport, making it a handy option for UK-based landlords.

As mentioned earlier, Brussels historically has a solid property market and owners benefit from not having to pay capital gains tax (CGT) on any residential building held for more than five years. There is also no CGT payable on shareholder transactions, making it an attractive possibility for investors seeking a safe place to put their money.

Interestingly, around 40 per cent of sales at Leopold Village have so far been investment purchases from European buyers. It seems Belgium's property potential is quickly being unraveled as the one of the world's best-kept secrets.

For more information on the development, visit LeopoldVillage.com.

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