Are you planning to move to Luxembourg? To find a place to live, it is important to know that real estate prices are high, both for sale and for rent.
Advertised prices are now at levels higher than those of major European cities . These prices continue to rise due to a shortage of housing.
Characteristics of the Luxembourg real estate market
Insufficient real estate supply compared to demand
The Luxembourg real estate market is clearly marked by an insufficiency of supply compared to demand. The appearance and development of new districts (Cloche d’Or, Belval, …) is not enough to meet the demand for buying or renting real estate.
On the ground, we note the permanent presence of construction sites of collective buildings or individual houses. Despite this, the supply is still not sufficient to meet the influx of demand. And this growth in demand is not about to stop.
Indeed, the population is still likely to increase significantly in the coming decades. Economic growth is always there, attracting new workers.
Statec reports a need for 5,600 to 7,500 additional housing units per year.
Real estate prices continue to soar
For several years now, real estate prices in Luxembourg have continued to soar. See the latest real estate trends here.
Real estate appears to be overvalued in Luxembourg according to several specialists. The European Commission estimates this overvaluation of real estate, up to +28%. In the recent period since 2010, housing prices have increased by +56%. Over the same period, the median income increased by only +35%.
If we take 2005 real estate prices as a base of 100, they have been multiplied in 2021 by :
- 2.6 for home sales, all municipalities and all properties combined
- 3.0 for apartment sales
- 1.6 for house rentals
- 1.7 for apartment rentals.
See the cost of housing in the household budget.
Even today, there is no sign that real estate prices will fall. That’s why the government and municipalities are taking key steps to create more housing. The tax burden will be increased from 2023 on building land and empty houses.
Average advertised prices in Luxembourg 2022
Sale price of the units
You want to buy an apartment or a house in Luxembourg? We detail here all the good reasons to buy your home.
According to recorded notarized deeds, sales prices in Q2 2022 compared to the previous year increased by :
- 8.2% for existing apartments (+14% in 2021)
- 9.6% for apartments in future state of completion (+4% in 2021)
It should be noted, however, that new sales take place more in expensive areas such as the capital city of Luxembourg or its suburbs.
Sale price of the apartments
On average, the announced prices for the sale of apartments in the Grand Duchy were 10,400€/m² at the end of 2021 throughout the country. The average advertised price of an apartment was 912,000 euros.
In Luxembourg-City the advertised prices are on average 13.000 €/m², with an average advertised price of 1.061.000 € for an apartment.
In the neighboring communes, one counts for the old prices to the sale of 10.365 €/m ² in the commune of Sandweiler, 10.898 €/m ² for the commune of Hespérange, 9.587 €/m ² for Walferdange, 10.977 €/m ² for Strassen and 13.056 € / m² for Bertrange.
House sale prices
On average at the end of 2021, the advertised prices for the sale of houses in the Grand Duchy of Luxembourg was 6,013 €/mC for the national average. The average advertised price of a house was 1,379,694 euros.
In the city of Luxembourg, the average advertised price for a house was 2,147,824 euros, for a price of 9,727 €/m².
The further away from Luxembourg City, the lower the price per m². A house in Esch-sur Alzette is listed on average at 933.465 euros or 1. 067,412 euros in Ettelbrück.
*Source: Observatoire de l’Habitat – Liser
Average advertised rents by municipality
You want to rent a home? Here you will find our guide to renting.
But first, it’s important to know that rents are also generally on the rise. In July 2022, advertised prices per square meter averaged 32.27 euros per square meter over the last 12 months for the whole of Luxembourg.
The average rent per m² in Luxembourg City is 36.80 €/m², which is an average rent of 1,539 euros per month.
The rents of the apartments in the neighbouring communes are in the following averages:
- Sandweiler 1.891 euros, 1.508 euros in Walferdange, 1.800 euros in Hespérange and 1.758 euros in Strassen.
Here again the prices drop as you move away from Luxembourg. An apartment in Leudelange rents for an average of 1,085 euros per month, in Steinfort it costs about 1,595 euros.
*Source: Observatoire de l’Habitat – Liser
What are the criteria for evaluating a home?
You are looking to rent or buy a home in Luxembourg. How do you know if the price offered is in line with the market or overpriced? First of all, a few points of reference.
Price and surface in m²
The price per m² of a property is inversely proportional to its surface. The smaller the property, the higher the price per m². An apartment of less than 50 m² in Luxembourg is on average valued between 20 and 25% more per square meter than a family apartment of 130 square meters.
Small surfaces are nowadays very much in demand by investors. Prices are often overvalued, especially in older homes. Landlords set their prices according to the prices asked in new housing.
Condition of the property
The condition of the property being rented or purchased is a point to be taken into account in the evaluation. But beware of hidden costs! Some jobs are obvious to do, others less so.
The energy passport is a good indicator of the intrinsic quality of the property. Depending on the rating of the property, you will need to do some work or incur significant costs to heat the home.
The attractiveness of the city of Luxembourg
The City of Luxembourg is very attractive because of its economic dynamism. The workplaces are close (Kirchberg, Cloche d’Or), as are the schools. See our article where to live in Luxembourg City.
Esch-sur-Alzette is today the 2nd economic center of the country. The Belval district is currently in full development. The attractiveness of the south of the country should be strengthened with the development of former industrial wastelands (see below) and transport development projects.
Outdoor spaces
Since the Covid crisis and subsequent containment, housing with an exterior is in high demand. Their price has increased considerably compared to homes without a balcony or garden.
Count on paying about 8% more for a balcony, 12% for a garden. In fact, garden level apartments are now more sought after.
Valuation of garages and parking lots
Garages and indoor parking spaces weigh heavily in the acquisition budget of a property. Today, they can represent up to 15% of the total transaction amount.
Parking prices continue to rise. Valued on average in the territory at 42,000 euros at the end of 2017, they can be valued at 90,000 euros in new construction in Luxembourg.
The new districts to come in Luxembourg
Luxembourg continues its real estate development. The challenge today is to recover the maximum amount of land to achieve the number of housing units needed in the country.
The municipalities encourage construction on “hollow teeth”. They gradually transform green areas into building zones. The tax burden on wasteland and empty houses will increase considerably from 2023 onwards. The objective is to promote the sale or rental.
Industrial wastelands are increasingly valued.
Real estate developments in Luxembourg and the Centre region
Kirchberg district
Kirchberg represents a strong development potential for the City of Luxembourg. However, most of the land is privately owned and not always willing to sell.
Nevertheless, the Kirchberg district is developing at high speed to the north with the new Op der Schled site. In 2030, this will allow the number of inhabitants to increase by 10,000 people in nearly 5,000 additional homes. The Laangfur and Kuebebierg districts, the last remaining land reserves to be developed, are among them.
Cessange district
The Cessange district is also in full development. Located near the Cloche d’Or, it sees the creation of many Special Development Plans, notably around the Parc de Cessange. The housing developments Guddebierg, Im Grundchen, Rue Verte … should significantly increase the population of this district.
Neighborhoods Rollingergrund and Belair
The Rollingergrund area will also be transformed. A new “Faïencerie” project is being studied along the Rue de Rollingergrund. This project provides for a mixed living space, with an emphasis on urban living. Shops, nursery services, banks, restaurants and leisure facilities will be built around a central square. The Château de Septfontaines will be fully integrated into this new project. Pedestrian and bicycle paths will be part of the soft mobility promoted by the city of Luxembourg.
The project “Place de l’Etoile” at the intersection of the Belair and Rollingergrund districts will also be developed. An exchange island will be created between Luxembourg and the neighbouring municipalities such as Strassen. A new tramway line will connect Luxembourg to Strassen. 600 housing units and new shops will also be built around a space dedicated to pedestrians. The Route d’Arlon should be diverted by a tunnel with the creation of an underground public transport station. This project is part of the Mobility Plan 2035.
Sandweiler
Sandweiler in the east of the city of Luxembourg should see the construction of 20 new buildings. Located in the immediate vicinity of the capital and the airport, Sandweiler is a land reserve in the middle of nature. The project includes the construction of 110 additional housing units, office space and retail space.
South Region Real Estate Developments
Esch-sur-Alzette
Esch-sur-Alzette also continues its mutation with the creation of 2 new districts. This confirms the attractiveness of Esch-sur-Alzette and especially its good economic health.
Rout Lens on the Terres Rouges side will allow the construction of between 3,000 and 3,500 housing units by 2026. Metzeschmelz will be built on the industrial wasteland between Esch and Schifflange with 10,000 homes planned for 2028.
Belval sector
The Belval neighborhood continues its development on the Square Mile. The two Capelli Towers will have 15 levels of housing with a height of 50 meters. As for the Route Lens wasteland in Esch, it relies on the environment on its 10.5 hectares.
Eventually, Belval should have nearly 7,000 inhabitants, compared to less than 400 in 2022.
Sector of Schifflange
After the Belval district in the municipality of Esch-sur-Alzette, it is the Schifflange sector that will be completely restructured.
The 61 hectares of former Arcelor Mittal industrial wasteland will be converted into housing (10,000 units, 30% of which will be affordable), schools, high schools, etc. The circular economy and social mix will be favored, as well as soft mobility.
City of Dudelange
The city of Dudelange will also launch the construction of a new district. Neischmelz will have nearly 1,000 housing units, 50,000 m2 of shops and 17,000 m2 of green spaces.
City of Kehlen
The community of Kehlen is investing in a new village, Elmen. This eco-responsible, mixed-use project will eventually have 2,000 inhabitants on a 27-hectare site.
Real estate projects in the North region
The City of Wiltz is also considering the deployment of its brownfields.
The project “Wunne mat der Wooltz” will see by 2030, more than 25 hectares converted into housing, work spaces and shops. Leisure and recreation areas will provide the 1,800 residents of the new site with a new quality of life. Here again, thecircular economy will be favored.
You will also find in this article the history of the latest real estate trends in Luxembourg.
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