Real estate market and prices in Luxembourg

Are you planning to move to Luxembourg? It is important to know that real estate prices are high, whether for sale or rent. The advertised prices can be found today to levels equivalent to, or even 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. Even if new districts have appeared in recent years (Cloche d’Or, Belval, etc.) and the municipalities are moving towards freeing up building land, the new constructions are not enough to satisfy potential buyers.

Despite the ongoing construction of multi-family buildings and single-family homes, the supply is still not sufficient to meet the influx of demand.
Studies indicate a significant increase in the population in the coming decades. This does not suggest that prices will fall, especially since economic growth is still strong. 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.

Some specialists have been saying for the last 2 or 3 years that real estate is overvalued in Luxembourg. The European Commission estimates this overvaluation of real estate, up to +28%. Between 2010 and 2019, housing prices increased by +56%, while median income only increased by +35% over the same period.

If we take 2005 real estate prices as a base of 100, they have been multiplied in Q3 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.

What are the criteria for evaluating a home?

The 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.

The attractiveness of Luxembourg City

The City of Luxembourg is a very attractive place to live because of its economic dynamism. The workplaces are closer (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 with the Belval district. The attractiveness of the south of the country should be reinforced with the development of former industrial wastelands (see below).

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.

Average advertised prices in Luxembourg

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.

However, it should be noted that according to the notarized deeds recorded, the sale prices announced in the 3rd quarter of 2021 for apartments have increased by +14% compared to the previous year. Prices for Sales in Future State of Completion have increased by +4% in one year. It should be noted, however, that the relative decline in prices per m2 for new housing corresponds more to a shift in new sales. These take place more in less expensive areas than the capital Luxembourg or the suburbs.

On average, the announced prices for the sale of apartments in the Grand Duchy were 7,805€/m² in the 3rd quarter of 2021 throughout the country.

In Luxembourg City the advertised prices are on average €10,897/sqm on a range of €7,600 to €14,300 per sqm in the former against €7,637/sqm in the period from 1 July 2016 to 30 June 2017. As for the new property, it is valued at an average of 12,206 euros per m2. It can even reach 17,000 euros on certain properties. The district of Weimerskirch is at the top of the range with 16,125 euros per m2, followed by the Kirchberg at 15,086 and the Limpertsberg at 14,196 euros per m2. Beggen and Hamm are the two districts where you can still negotiate the price of apartments at less than 10,000 euros per m2 on average.

The average value of an apartment is announced at more than 1.000.000 euros on the commune of Luxembourg, with there still disparities. This is the minimum amount to be expected to acquire a property in the districts of Dommeldange, Merl, Belair, Limpertsberg, Kirchberg, Cessange, Neudorf and the Upper Town.

In the neighboring communes, one counts for the old prices to the sale of 8.180 €/m² in the commune of Sandweiler, 8.999 €/m² for the commune of Hespérange, 9.005 €/m² for Walferdange, 10.068 €/m² for Strassen and 10.492 €/m² for Bertrange.

The further away from Luxembourg City, the lower the price per m². It is necessary to count 6.838 €/m² in Esch-sur Alzette or 6.950€/m² in Grevenmacher.

Average advertised rents by municipality

You want to rent a home? You can find out how to do it here.

But first, it is important to know that rents are generally increasing. The advertised prices per m² in 2021 amounted to 31.43 euros per m² on average against 27.05 €/m² in 2019 for the whole of Luxembourg.

The average rent per m² in Luxembourg City is 36.28 €/m² with differences between the districts of Cents and Kirchberg at less than 30 euros per m², and Limpertsberg or Belair, even Gasperich. You will have to pay on average more than 1,900 euros to rent an apartment in Kirchberg, Limpertsberg or the Upper Town.

The rents of the apartments in the neighboring communes are in the following averages: in the commune of Sandweiler 1.749 euros, 1.474 euros in Walferdange, 1.654 euros in Hespérange and 1.722 euros in Strassen.

Here again the prices drop as you move away from Luxembourg. An apartment in Leudelange rents for an average of 1,245 euros per month, in Steinfort it costs about 1,491 euros.

*Source: Observatoire de l’Habitat – Liser

The new districts to come in Luxembourg

Luxembourg continues its development. The challenge today is to recover as much land as possible to continue the real estate development necessary for the country. The municipalities encourage the construction of hollow spaces, and gradually transform green areas into building zones. There is talk today of changing the taxation of wasteland and empty homes to encourage sale or rental. Industrial wastelands are increasingly valued.

  • Central Region / Luxembourg

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. 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.

    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.

    The Rollingergrund district will also be transformed with a new “Faïencerie” project along Rollingergrund Street. This project provides for a mixed living space with urban life thanks to shops and services such as a crèche, bank, restaurants and leisure facilities around a central square. The Château de Septfontaines will be fully integrated into this new project. Pedestrian and cycle paths will be part of the soft mobility promoted by the City of Luxembourg.

    The “Place de l’Etoile” project at the intersection between the Belair and Rollingergrund districts will also be developed to create an exchange island between Luxembourg and neighbouring municipalities such as Strassen. A new tramway line will link Luxembourg to Strassen. 600 housing units and new shops will also be built around a pedestrian area. The Route d’Arlon should be diverted through a tunnel with the creation of an underground public transport station.

    • Southern Region

    After the Belval district in the municipality of Esch-sur-Alzette, it is the Schifflange sector that will be completely restructured. The former industrial wasteland of Arcelor Mittal in the Esch/Schifflange sector will see the 61 hectares converted into 50% housing (10,000 homes, 30% of which are affordable), schools, high school, … The circular economy and social mix will be favored, as well as soft mobility.

    The city of Dudelange will also launch a new district, Neischmelz, which will see the construction of nearly 1,000 housing units, 50,000 m2 of shops and 17,000 m2 of green spaces.

    Esch-sur-Alzette also continues its mutation with first of all Belval, still in development on the Square Mile district with notably the 2 Capelli Towers, 50 meters high – that is to say 15 levels – and Belval North. As for the Route Lens wasteland in Esch, it relies on the environment on its 10.5 hectares.

    The municipality of Kehlen is investing in a new Elmen village, which will eventually have 2,000 inhabitants on an area of 27 hectares.

    • Northern 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.

    Do you have a property for sale or rent in Luxembourg? How to do it?