Are you thinking of moving to Luxembourg? If you're looking for a place to live, you'll need to be aware that property prices here are high, whether for sale or rent.
In fact, property prices in Luxembourg are now higher than in other major European cities. It has to be said that the country is suffering from a housing shortage in the face of an ever-increasing population.
Characteristics of the Luxembourg real estate market
Real estate supply insufficient to meet demand
The Luxembourg real estate market is clearly marked by a shortage of housing supply in relation to demand.
On the ground, there are permanent construction sites for apartment blocks and single-family homes. Nevertheless, despite the emergence and development of new neighborhoods (Cloche d'Or, Kirchberg, Belval, etc.), demand for property to buy or rent is not being met.
Real estate supply remains insufficient to meet the influx of demand. And there's no end in sight to the growth in demand, as Luxembourg's resident population continues to rise significantly . New workers continue to arrive, attracted by attractive career prospects and salaries,
Statec continues to forecast a need for 5,600 to 7,500 additional homes per year. However, the housing market seems to have come to a standstill since the end of 2022.
Market slows after price surge
The Luxembourg real estate market has seen a surge in prices since 2019. The European Commission estimated this overvaluation of real estate at up to +28%. Over the recent period since 2010, housing prices have risen by +56%. Over the same period, median income rose by only +35%.
If we take 2005 real estate prices as base 100, they will 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.
Faced with a market deemed overvalued and on the verge of overheating, the government and local authorities are taking steps to create more housing.
Property prices rose by over 10% in 2019, 2020 and 2021. But since the end of 2022, growth has slowed to "just 9.6%" for the year. The 4th quarter of 2022 and the 1st quarter of 2023 even show a decline in prices. See the latest real estate trends here.
Average real estate prices
Housing prices in Luxembourg on the decline
Would you like to buy an apartment or house in Luxembourg? Here are all the good reasons to buy your home.
Prices recorded by notaries at the end of 2022
We present here the prices recorded by notaries, i.e. actually paid by buyers, at the end of 2022.
According to registered notarial deeds, sales prices in Q4 2022 rose 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-build sales tend to take place in expensive communities such as the capital Luxembourg or its suburbs.
On average, prices recorded for the sale of old apartments in the Grand Duchy were €8,734/m² at the end of 2022, compared with €10,400/m² at the end of 2021 for the country as a whole. The average price per square metre for older apartments ranged from €5,338 to €13,162.
In the new-build sector, the average price of VEFA apartments was €9,347 per m², with a price per m² range from €5,521 to €15,348.
At the end of 2022, the average cost of buying an apartment was €910,819, compared with €912,000 at the end of 2021.
Announced sales prices for apartments in Q3 2023
These sales prices are intended as asking prices on real estate websites. They do not correspond to the prices actually paid by buyers. There is always a discrepancy between the prices advertised and the prices paid.
In Luxembourg-City, advertised prices averaged €12,071/m² in Q3 2023, versus €13,100/m² at the end of 2022. Average advertised prices for apartments were €1,014,331, versus €1,062,735 at the end of 2022.
In neighboring towns, in Q3 2023, advertised prices per m² for the sale of old apartments stood at :
- 12,420 euros versus 12,877 euros by the end of 2022 and 13,056 €/m² in 2021 for Bertrange.
- 10,729 euros versus 10,811 euros at the end of 2022 and 10,898 €/m² in 2021 for the commune of Hespérange,
- 9,340 versus €9,941 at the end of 2022 and €10,365/m² in 2021 in Sandweiler,
- 11,292 euros compared with 11,243 euros at the end of 2022 and 10,977 €/m² in 2021 for Strassen
- 9,381 euros 9,894 euros by the end of 2022 and 9,587 €/m² in 2021 for Walferdange.
Let's bet that the prices announced for the end of 2023 will confirm a fall in real estate in Luxembourg.
Advertised selling prices for houses in Luxembourg
In Q3 2023, average advertised house prices in the Grand Duchy of Luxembourg were €6,620/m², compared with a national average of €7,000/m² in 2022. The average advertised price of a house was €1,314,360 in Q3 2023, compared with €1,388,411 in 2022 and €1,379,694 in 2021.
In Luxembourg City, average advertised house prices were 1,887,781 euros in Q3 2023, compared with 2,060,022 euros in 2022 and 2,147,824 euros in 2021.
The inner suburbs around Luxembourg remain highly sought-after for their excellent quality of life. However, house prices are also falling. For example, selling prices for houses at :
- 1,885,041 euros against 2,111,178 euros at the end of 2022 in Bertrange
- 1,969,478 euros against 2,413,118 euros at the end of 2022 in Niederanven.
- 1,647,903 euros compared with 1,807,341 euros at the end of 2022 in Sandweiler
- 2,157,143 euros compared with 2,463,478 euros at the end of 2022 at Strassen
The further away from Luxembourg City, the lower the price per m². A house in Esch-sur Alzette will average 618,631 euros in Q3 2023, compared with 906,191 euros in 2022 and 933,465 euros in 2021.
*Source: Observatoire de l'Habitat - Liser
Average advertised rents by commune
Advertised rents in Luxembourg are generally on the rise. According to Immotop, advertised prices per sq.m. averaged 25.28 euros per sq.m. at the end of December 2023, compared with an average of 24.05 euros per sq.m. at the end of 2022.
The average rent per m² in Luxembourg-City is €30.53/m² at the end of 2023, compared with €28.39/m² at the end of December 2022.
How do you calculate the price of a home in Luxembourg?
You're looking to rent or buy a property in Luxembourg. How do you know whether the price offered is in line with the market or overvalued? First of all, here are a few points of reference.
Property prices and surface area (m²)
In Luxembourg, the price per m² of a property is inversely proportional to its surface area. The smaller the property, the higher the price per m². An apartment of less than 50 m² in Luxembourg is on average valued at between 20 and 25% more per m² than a 130 m² family apartment.
Today, small surface areas are very much in demand among investors. Prices are often overvalued, especially for older properties. Landlords are setting their prices in line with those of new-build properties.
Condition of the property and work to be carried out in your new home
The condition of the rental or purchase property is a point to be taken into account in the valuation. But beware of hidden costs! Some work is obvious to carry out, while others are less visible at first glance. Be sure to pay close attention when visiting different properties.
To assess the intrinsic quality of a property, the energy passport is a good indicator of energy efficiency and the work that needs to be done, even if it's not visible. Depending on the property's CPE rating, you'll be required to carry out a certain amount of work to improve energy efficiency and save on heating costs.
Attractiveness of Luxembourg City and housing prices
Luxembourg City is a very attractive place to live, thanks to its dynamic economy. Workplaces are close by (Kirchberg, Cloche d'Or), as are schools. See our article on where to live in Luxembourg City.
Today, Esch-sur-Alzette is the country's 2nd economic hub. The Belval district is currently in full development. The attractiveness of the south of the country is set to increase with the reclamation of former industrial wastelands (see below) and transport development projects.
Outdoor spaces drive up prices
Expect to pay around 8% more for a balcony, 12% more for a garden. In fact, garden-floor apartments are more sought-after today.
Soaring garage and parking prices in Luxembourg
Garages and indoor parking spaces weigh heavily in the acquisition budget of a property in Luxembourg. Today, they can account for up to 15% of the total transaction.
Given the difficulty of parking in the center of Luxembourg City, parking prices continue to rise. Valued at an average of 42,000 euros at the end of 2017, they can be as high as 90,000 euros in Luxembourg's new buildings. Some parking spaces are selling for more than 150,000 euros!
New districts coming to Luxembourg
Luxembourg continues its real estate development. The challenge for Luxembourg politicians today is to reclaim as much land as possible to achieve the number of housing units the country needs.
Municipalities are encouraging construction in "empty spaces". They are gradually transforming green areas into building zones. The tax burden on undeveloped land and empty homes is set to rise considerably from 2023 onwards. The aim is to encourage the sale or rental of empty properties.
Industrial wasteland is also being redeveloped to create new neighborhoods.
Real estate developments in Luxembourg and the Centre region
Building projects in the Kirchberg district
The Kirchberg district represents strong development potential for the City of Luxembourg. However, most of the land is privately owned, and not always ready to sell.
Nevertheless, the Kirchberg district is developing at high speed to the north, with the new Op der Schled site . By 2030, this will increase the number of inhabitants in this district by more than 10,000, in almost 5,000 additional housing units. The Laangfur and Kuebebierg districts, the last remaining land reserves to be developed, are among the capital's major development projects.
Strong development potential in the Cessange district
The Cessange district is also undergoing significant real estate development. Located close to the Cloche d'Or industrial zone, this district benefits from a number of development plans for private individuals, notably around the Parc de Cessange. The Guddebierg, Im Grundchen and Rue Verte housing developments are expected to significantly increase the district's population.
Rollingergrund and Belair neighborhoods undergoing transformation
The Rollingergrund district is being transformed. A new "Faïencerie" project is being studied along Rue de Rollingergrund. The project is designed to create a mixed-use, urban living environment. Shops, crèches, banks, restaurants and leisure facilities will be built around a central square. The Château de Septfontaines will be fully integrated into the new project. Pedestrian and cycle paths will be part of the soft mobility approach advocated by the City of Luxembourg.
The "Place de l'Etoile" at the intersection of the Belair and Rollingergrund districts is also the subject of a major development project. The square is to become a hub between Luxembourg and neighboring communities 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 is to be diverted by a tunnel, with the creation of an underground public transport station. This project is part of the Mobility Plan 2035.
Development of Sandweiler
Sandweiler, to the east of Luxembourg City, is set to see the construction of 20 new buildings. Situated in the immediate vicinity of the capital and Luxembourg airport, the town of Sandweiler is a natural land reserve. The project calls for the construction of 110 additional housing units, office space and retail outlets.
Real estate developments in southern Luxembourg
Creating new districts in Esch-sur-Alzette
The town of Esch-sur-Alzette is also continuing its transformation with the creation of 2 new districts . Once a neglected industrial town, Esch-sur-Alzette is enjoying a new lease of life thanks to lower prices and, above all, a healthy economy with the Belval cluster.
Metzeschmelz will make the most of the industrial wasteland between Esch and Schifflange, with 10,000 additional homes planned for 2028.
Enhancing the Belval sector
The Belval district continues its development on the Square Mile. The two Capelli Towers will feature 15 storeys of housing at a height of 50 metres. As for the Route Lens wasteland in Esch, the 10.5-hectare site is focused on the environment. Between 3,000 and 3,500 housing units are expected to be built by 2026.
Eventually, Belval will have a population of almost 7,000, compared with less than 400 in 2022.
Restructuring the Schifflange sector
After the Belval district in Esch-sur-Alzette, the Schifflange area, a former steelworks site, will be completely restructured.
Arcelor Mittal plans to convert 61 hectares of industrial wasteland into housing (10,000 units, of which 30% affordable), schools and a high school, etc. The circular economy and social mix will be promoted, as will soft mobility.
New district in the city of Dudelange
The town of Dudelange will also be launching the construction of a new district. Neischmelz will feature around 1,000 homes, 50,000 m2 of retail space and 17,000 m2 of green space.
A new village in the community of Kehlen
The community of Kehlen is investing in a new village, Elmen. This ambitious eco-responsible project will eventually be home to 2,000 inhabitants in a mixed environment, on a total surface area of 27 hectares.
Real estate projects in northern Luxembourg
The town of Wiltz is also planning to redevelop its brownfield sites. By 2030, the "Wunne mat der Wooltz" project will see over 25 hectares converted into housing, workspaces and shops. Leisure and recreation areas will enable the 1,800 inhabitants of the new site to enjoy a new quality of life. Once again, the focus is on the circular economy.
In this article, you'll also find a history of the latest real estate trends in Luxembourg.