Best asset class

Housing has been outperforming all other asset classes in our country for the last 25 years. The house you could buy for 75000 EUR in the year 2000, costs you 375000 EUR today. And there is no light at the end of the tunnel coming. The incredible influx of immigrants in Belgium (and Europe) makes the demand for new homes and apartments higher and higher…

But the birth rate is declining year by year, so without immigration the population of Belgium would be declining and so would the demand for housing do.

So, the question is, will this bubble burst one day? If immigration dries up? Or will the European Union keep the borders open for Middle-Eastern and African immigrants?

Wages far from followed

Average wages in Belgium was 2200 EUR in 2000, and has grown to 3886 EUR at this day. So th budget that is spent on housing has grown immensely since the year 2000. People that buy a house today spend on average 40 % of their budget on housing! Which was only a mere 10 to 15 % in the year 2000. This rise is unsustainable and is testing the wallets of current buyers.

You don’t have to be a mathematical genius to see that this is not going to end well. At some point, housing will become unaffordable, even rent has risen in the same way. So at some point houses won’t get sold anymore, because people just can’t afford it anymore…

The question is not if, but more like when?

Sincerely,

Pele23

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