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🇧🇪 Belgium /Economy & Trade

Belgian household wealth grows 3%, but real gains slow significantly

From VRT NWS · (8m ago) Dutch

Translated from Dutch, summarized and contextualized by DistantNews.

TLDR

  • The average wealth of Belgian households increased by 3% in the past year, reaching €286,250.
  • Real wealth growth was modest at 0.9% after accounting for 2.4% inflation, significantly slower than the 11% growth seen in the previous year.
  • Increased household debt, particularly for mortgages and renovations, and a shift towards savings accounts contributed to the slower wealth accumulation.

The latest figures from Keytrade Bank and Ghent University paint a picture of modest wealth growth for Belgian households. While the median wealth has indeed climbed by 3% to €286,250, a closer look reveals that real prosperity has barely budged, inching up by a mere 0.9% after factoring in inflation. This is a stark contrast to the booming 11% growth experienced last year, signaling a significant slowdown.

Kijk je naar de onderdelen van ons vermogen, dan zien we dat activa, zoals vastgoed en beleggingen, wel sterk gestegen zijn, maar de schulden nog veel sterker

— Koen IngelbrechtProfessor of financial economics at Ghent University, explaining the reasons behind slower wealth growth.

Experts point to a substantial increase in household debt as a primary driver of this deceleration. Mortgage borrowing, fueled by persistently rising house prices and the escalating costs of energy-efficient renovations, has surged. This increased leverage, while potentially beneficial long-term for home efficiency, is currently impacting net wealth accumulation.

De stijging in de schulden was 3 tot 4 maal hoger dan vorig jaar.

— Koen IngelbrechtProfessor of financial economics at Ghent University, detailing the increase in household debt.

Interestingly, Belgians have also rediscovered their savings accounts, which now represent 11% of total assets, up from 9% last year. This shift is attributed to the waning attractiveness of term deposits following the end of the popular state bond, coupled with lower interest rates. The move back to traditional savings reflects a preference for security amidst economic uncertainties.

Gezinnen moeten ook daarvoor meer lenen. Dat kan op korte termijn nefast zijn - de schulden stijgen - maar op langere termijn zal dat wel renderen, met dank aan een betere efficiëntie van je huis.

— Koen IngelbrechtProfessor of financial economics at Ghent University, discussing the long-term benefits of borrowing for renovations.

The report also highlights a significant trend: for the first time, homeownership now accounts for over half of the average Belgian household's wealth, rising from 45% to 51%. This underscores the enduring importance of real estate as the primary wealth-building pillar for families in Belgium, even as other asset classes and debt levels play a more complex role in the overall financial picture.

Dat heeft er ook voor gezorgd dat lenen iets goedkoper geworden is. Dat laat toe dat mensen een hoger bedrag kunnen lenen.

— Koen IngelbrechtProfessor of financial economics at Ghent University, explaining the impact of ECB interest rate cuts on borrowing.
DistantNews Editorial

Originally published by VRT NWS in Dutch. Translated, summarized, and contextualized by our editorial team with added local perspective. Read our editorial standards.

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