Brussels (Brussels Morning) – Half of home builders predict a sharp decline in new homes and apartments due to rising costs and strict regulations. Bouwunie advocates tax benefits to boost construction and address housing affordability issues.
How is the demand for new apartments changing?
One in two home builders expects a decrease to a sharp decrease in the number of new homes. The demand for new apartments in particular is decreasing sharply, according to a press release from Bouwunie. The sector organisation is asking for a tax benefit. A survey by Bouwunie among general contractors and shell contractors shows that half of the house builders expect a sharp decline in the number of new homes. The prospects for new apartments are even worse. Seven out of ten contractors predict a (sharp) decline.
What factors are contributing to the construction decline?
“New construction is in free fall. Our home builders have been feeling that in their order books for some time now,” says Bouwunie CEO Jean-Pierre Waeytens. “The recent analysis by the National Bank confirms the trend. And you can also see it in the number of building permits issued. In 2023, there were already 9 per cent fewer than in 2022, when there were also 8 per cent fewer than the year before. The higher prices for building plots and material prices, the higher interest rates, strict energy requirements and the increased wage costs simply make construction (too) expensive.”
What tax benefits is Bouwunie advocating for builders?
Bouwunie fears for the future. “If the number of homes does not increase, the affordability and supply of housing will only come under more pressure,” says Waeytens. The organization advocates measures such as a reduced VAT rate for demolition and reconstruction without restrictions and a tax benefit for those who build or renovate energy-efficiently. In concrete terms, it wants to make 15 per cent of all construction expenses and investments deductible from taxable income with a ceiling of 9,000 euros.
How are strict permit procedures impacting home construction?
The strict permit procedures or “multiple appeal procedures that are partly motivated by emotional objections” are making it increasingly difficult for home builders, the sector states. More opportunities must be created for the home construction of the future. Bouwunie refers to densification, infill and alternative forms of housing such as splitting up homes, cohousing or tiny houses.
Bouwunie’s survey demonstrates that one in five contractors has too little work. For more than a third, the order book is filled less far in advance than usual. There is good news for the renovation sector. Two out of three contractors expect a status quo or an improvement. “A large and thorough renovation wave is also necessary if we want to achieve the climate objectives and improve the supply of quality homes,” it is said.
