Press release: Antwerp most attractive to invest, Ghent or Leuven do not pay off

For those looking to invest in real estate in Flanders, it seems that the central and eastern regions are more promising, according to analyses conducted by real estate data platform Realo. Thanks to a unique approach, an objective gross rental yield can now be calculated for the entire Flanders region.

Investing in real estate in Flanders yields an annual gross return of 3.24% for houses and 3.1% for apartments. These figures come from an analysis performed by real estate data platform Realo to calculate the gross rental yield per municipality in Flanders. However, there are clear differences between the five provinces of Flanders. In general, the rental yield is lower in East and West Flanders compared to the rest of Flanders. Specifically, the region around Antwerp, the Brussels Periphery, and Limburg appear to be attractive regions for real estate investment.

High rental prices in Antwerp boost yield

Investors who purchase an apartment in the city of Antwerp and subsequently rent it out can expect an annual gross rental yield of 3.52%, the highest among all central cities in Flanders. For houses as well, Antwerp tops the list with a yield of 3.85%. This stands in stark contrast to central cities like Gent or Leuven, which perform well below the Flemish average. For instance, Gent has the lowest rental yield for apartments among the central cities, with only 2.4%, while Leuven performs the poorest for houses with a 2.83% yield.

Fabrice Luyckx, data analyst at Realo, finds these figures may be surprising at first glance but offers a logical explanation: "In cities like Gent and Leuven, property prices are very high—Leuven being the most expensive central city in Flanders—while rental prices are still relatively affordable. On the other hand, Antwerp is also expensive to buy property, but not as costly as Gent or Leuven, while Antwerp has been the most expensive central city to rent for years. This means that despite the high costs of buying property in Antwerp, rental income is significantly higher, leading to a much faster return on investment."

Dave Bracke, manager of Altro Vastgoedgroep, foresees changes in the near future for Gent: "In Gent, we have seen strong increases in rental prices only in the past year. I expect that in the coming six months to a year, rental prices there will align more with selling prices. The pressure on the rental market is currently very high due to limited supply."

In Limburg, the opposite scenario unfolds. The low property prices in Limburg — making it still the cheapest province in Flanders to buy — allow for a lower rental price while achieving a good return on investment. Many municipalities in Limburg, such as Maasmechelen or Tongeren, achieve rental yields that belong to the highest in Flanders. Hasselt stands out as a more expensive central city compared to the rest of the province but still falls around the Flemish average for both houses and apartments.

An objective criterion

These analyses provide, for the first time, a comprehensive and objective view of the gross rental yield in Flanders. Data analyst Fabrice Luyckx explains: "One of the challenges in calculating a representative ratio between rental and selling prices is that two very different markets are being compared. For instance, the share of apartments on the rental market is much higher than in sales. Additionally, the quality of the properties can differ significantly. The Woonsurvey 2018 revealed that the quality of rental properties generally falls below that of sold properties in Flanders. Simply comparing median rental prices with median selling prices can result in a distorted image."

These issues are circumvented using Realo's estimation tool. Since the Realo Estimate® provides both a selling and rental price estimate for each address, the gross rental yield for each property can be individually calculated. This way, different markets are no longer compared, as the property's quality remains constant for each yield calculation. Moreover, this offers a broader perspective on the entire housing stock of Flanders, not just recently sold or rented properties.

Dave Bracke from Altro Vastgoedgroep further nuances the results based solely on rental yield: "Especially for large cities, you should consider a composite return on your investment. In addition to the rental yield, the appreciation yield is also an important factor. We estimate that prices in large cities increase by an average of 2 to 3 percent each year, which is about the same as the rental yield."

Furthermore, the results represent a gross rental yield, which means that additional costs such as registration fees or annual expenses like property tax or maintenance costs have not been taken into account yet. Nevertheless, the results offer an initial overview of the significant differences that exist among municipalities in Flanders.