Nathalie Nieuwinckel, head of acquisitions and development at the Vooruitzicht Group, is not having an easy time of it at the moment. But she is staying the course and appealing to all players and decision-makers to speed up the renovation of the Belgian building stock.
Where do we stand in Belgium – and elsewhere – with regard to raw material costs at a time when energy prices are soaring?
Since the autumn of 2021, construction prices have risen by between 10 and 15 per cent. This increase was initially due to the recovery of the economy and the subsequent increase in demand for raw materials and energy, as well as the disruption of production and supply chains. The outbreak of war in Ukraine earlier this year exacerbated this trend. But since June, we have seen a slight decline in some commodity prices due to fears of a global recession. We expect prices to stabilise in the short term and to rise in line with the historical average in the future.
How do these additional construction costs affect sale prices?
They should lead to an increase in the sales prices of new buildings in the order of five to eight per cent.
For a growing segment of the population, we hear that new housing is becoming unaffordable. Especially as financing costs are rising. Can you confirm this?
Not really! The unique mechanism in Belgium of automatically linking wages to the salary scale grade ensures that the purchasing power of employed Belgians also increases over the course of life. As a result, the increased sales prices remain affordable for the private buyer. And the indexation of rents in turn guarantees the return for the investor, because the tenant on the private market has also seen his salary increase.
I would even add that, given the current energy situation, a new house is designed to be energy-efficient – or even energy-neutral – and thus have very low consumption costs. This is a strong argument in favour of new buildings, especially in a context of ever-increasing energy bills that have little impact on new construction. Total cost of ownership (TCO) – the sum of the purchase price, interest charges, maintenance costs and energy consumption over the life of the property – therefore puts the affordability of new property in a completely different light.
Europe requires Member States to have an energy-neutral building stock by 2050. But the Belgian building stock is currently being renovated at a rate of 1% per year. How is the construction sector negotiating the acceleration of this rate to achieve this?
It is a general state of mind that must be changed among our leaders and even among the general public. We need an electroshock to get out of the current inertia. The construction sector will have to be closely involved as a partner in this operation in the form of new technologies and specialised labour, for example. Banks can also contribute by facilitating the financing of energy-efficient housing. And the government must provide more effective incentives to motivate home owners.
What do you mean by “effective incentives”?
Genuine incentives on renovations and a definitive and unambiguous regime for the reduction of VAT to 6% on demolition and reconstruction. All measures that reduce our energy needs while guaranteeing our independence from fossil fuels and the right to affordable and quality housing in our country must be put on the table without further delay.