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Overview of the Luxembourg housing marketMay 2019
Editorial
The BIL IMMO index – the go-to tool for understanding the Luxembourg housing market.
Developed in collaboration with PwC, the BIL IMMO index offers a clear overview of changes in the Luxembourg housing market since 1980. It contains the relevant data and indicators essential for understanding this particular market.
Launched in October 2015, the BIL IMMO index confirms BIL’s role as a leading expert for all real estate investment and development projects. It supplements a comprehensive offering of financial solutions, which our Real Estate Desk specialists will be more than happy to discuss with you
The BIL IMMO index stood at 2.66 at year-end 2018, a new record high. This increase is mainly due to a sharp acceleration in the prices of existing properties, which are catching up with the prices of new properties – a rare phenomenon indeed. However, it is also due to a peak in construction activity, a record volume of mortgages and a large number of building permits issued, particularly for major projects in Luxembourg City. In light of these exceptional circumstances, we believe that the index will probably cool down when the next publication is released.
Many of the ratios that make up the BIL IMMO index are recalculated based on regular statistics updates from a number of sources (OECD, BRI, STATEC, Central Bank, Observatoire de l’Habitat, PwC), and thus the index (currently at 2.66) could be revised downwards during the next quarterly revision.
As explained below, the Luxembourg housing market remains buoyant, has retained its investment potential and is still just as attractive to individuals financing their own housing.
In both cases, BIL’s specialists are here to help you find the most appropriate solution for your real estate development plans or investments. We wish to thank you for your continued trust, and would be delighted to meet with you soon should you have any questions or require any further information on the BIL IMMO index.
Gilles Prim Tom LesselHead of Real Estate Head of Corporates & Real Estate
Our methodologyThe BIL IMMO index is an initiative of BIL in collaboration with PwC. It is the weighted average of seven indicators. Each indicator charts the changes in a particular aspect of the housing market in Luxembourg.
The table below describes the selected indicators and explains the extent to which they are relevant in measuring the housing market situation.
1 Ratio of house prices to rent This affects the decision of whether to buy or rent.
2 Ratio of house prices to income This shows the affordability of buying a home, based on household income.
3 Ratio of house prices to the consumer price index (CPI) This shows the real appreciation of house prices.
4 Ratio of house prices to the population This compares price changes to population changes to measure the extent to which house price inflation reflects demographic trends.
5 Ratio of construction activity to economic activity This shows the weight of the construction industry in the economy as a whole.
6 Ratio of mortgage lending to gross domestic product (GDP) This shows changes in the amount of mortgage lending relative to economic growth.
7 Ratio of building permits to population growth This shows the extent to which the change in the number of homes is linked to demographic trends.
Each ratio is built from data published by recognised statistics offices (STATEC, BCL, IMF, etc.) over the period 1980 to 2018. Missing data has been estimated through linear extrapolation.
The table below lists the necessary data and sources.
Données recueillies Sources
A House prices Bank for International Settlements (BIS) and STATEC
B Rent STATEC
C Income OCDE
D Consumer Price Index (CPI) STATEC
E Population STATEC
F Construction activity and economic activity STATEC
G Mortgage loans BCL
H Gross Domestic Product (GDP) FMI, STATEC
I Building permits STATEC
3
Prices / income
Prices / CPI
Construction activity / economic activity
Mortgages to GDP
Building permits /
population
Prices / population
BIL IMMO index
Prices / rents
1980
1982
1984
1986
1988
1990
1992
1994
1996
1998
2000
2002
2004
2006
2008
2010
2012
2014
2016
2018
The BIL IMMO index between 1980 and 2018The BIL IMMO index provides an overview of the Luxembourg housing market, based on changes in the price of homes for sale and for rent, as well as factors underlying supply and demand.
The change in the BIL IMMO index over the 1980–2018 period is represented below. Changes over the period were discussed in the first publication of the BIL IMMO index, which can be accessed here: https://www.bil.com/Documents/brochures/bil-brochures-immoindex-en.pdf
Changes in the BIL IMMO index from 1980 to 2018
The weighting of each indicator results from an analysis of each main component. This method is used to weight each indicator in a way that best reflects the seven ratios’ variability through a single index. To do this, each ratio has been standardised and trend-adjusted, such that the index produced by analysing each main component is centred on zero.
Variations in the index summarise variations in the seven ratios. Given that all of the ratios have been constructed uniformly, a reduction in the index would tend to suggest a slacker market, whereas an increase would be interpreted as showing a more buoyant market. Extreme values in the range reflect very low probabilities.
Source: PwC Market Research Centre
• If the index is close to -3, it means that the change in several indicators is more negative than has been observed historically. The market can then be considered to be «in crisis».
• If the index is close to +3, it means that the increase in several ratios has been much greater than their historical trends. The market can then be considered to be «overheated».
4
Over the 1980–2018 period, the seven ratios that make up the index varied as follows:
1 This graph actually starts in 1995, as construction data was not available before then.
1980
1982
1984
1986
1988
1990
1992
1994
1996
1998
2000
2002
2004
2006
2008
2010
2012
2014
2016
2018
2.3
1.8
1.3
0.8
0.3
Ratio of house prices to rent
Sources: PwC, BRI, STATEC
1980
1982
1984
1986
1988
1990
1992
1994
1996
1998
2000
2002
2004
2006
2008
2010
2012
2014
2016
2018
2.3
1.8
1.3
0.8
0.3
Ratio of house prices to the CPI
Sources: PwC, BRI, STATEC
1980
1982
1984
1986
1988
1990
1992
1994
1996
1998
2000
2002
2004
2006
2008
2010
2012
2014
2016
2018
1.25
1.05
0.85
0.65
Ratio of construction to economic activity1
Sources: PwC, BRI, STATEC
1980
1982
1984
1986
1988
1990
1992
1994
1996
1998
2000
2002
2004
2006
2008
2010
2012
2014
2016
2018
2.3
1.8
1.3
0.8
0.3
Ratio of building permits to population
Sources: PwC, STATEC
1980
1982
1984
1986
1988
1990
1992
1994
1996
1998
2000
2002
2004
2006
2008
2010
2012
2014
2016
2018
2.3
1.8
1.3
0.8
Ratio of house prices to income
Sources: PwC, BRI, STATEC, OECD
1980
1982
1984
1986
1988
1990
1992
1994
1996
1998
2000
2002
2004
2006
2008
2010
2012
2014
2016
2018
2.3
1.8
1.3
0.8
0.3
Ratio of house prices to the population
Sources: PwC, BRI, STATEC
1980
1982
1984
1986
1988
1990
1992
1994
1996
1998
2000
2002
2004
2006
2008
2010
2012
2014
2016
2018
1.9
1.4
0.9
0.4
Ratio of mortgages to GDP
Sources: PwC, BCL, STATEC
5
Recent change in the index
Frozen -3 +3 Overheated
• Residential property prices increased by 9.3% year-on-year between Q4 2017 and Q4 2018 (versus 4.3% over the previous year). The smoothed annual index confirms the price acceleration with a rise of 7.1% (versus 5.6% for the previous year). This trend was driven by a net acceleration in the prices of existing apartments (+8.5%) and existing houses (+7.3%), whereas the prices of new apartments grew by 5.6% (i.e. at the same or nearly the same rate as in 2016 and 2017).
• The ratio of residential property prices to rents therefore continues to rise, as the indicator used for rents edged up just 1.2% as an annual average and year-on-year in Q4. As such, if we consider the change in prices and rents over the last 10 years, the price index increased by 48% while the rent index increased by only 14%, which is lower than inflation over the same period (16%).
• At +1.8% year-on-year in Q4 2018, inflation had reached the European Central Bank’s target level for the euro zone. As an annual average, inflation stood at 1.6% in 2018, which was acceptable. Overall, real property price growth is very strong
(up 5.5%), pushing our ratio of house prices to the consumer price index even higher.
• Although Luxembourg’s population hit the 600,000 mark in 2017, population growth slowed considerably to 1.9% in that year, versus an average of 2.4% over the last ten years. Demographic growth stood at +2.0% in 2018, which confirms the slowdown observed a year earlier.
• The index is also soaring as a result of the sharp upswing in the mortgage to GDP ratio. The annual volume of home loans increased by 19.7% in 2018 compared with 2017. After EUR 7.13 billion in 2016 and EUR 7.25 billion in 2017, the total volume of the residential sector stood at EUR 8.65 billion in 2018. There was a net increase of 29.5% between Q3 (EUR 1.91 billion) and Q4 (EUR 2.47 billion).
• The notable upswing in the ratio of construction activity to economic activity also goes a long way to explaining the overheating shown by the index. Added value in the construction sector rose by 10.4% in 2018, versus just 6.2%
2 Past indices had to undergo major revision, primarily as a result of the sharp increase in 2018; past standard deviation figures were affected by the current high level of variance.
+2.66The BIL IMMO index stood at the record level of +2.66 in Q4 2018.
The index stood at 0.95 in Q4 2017 before rising to 1.77 in Q2 2018 2. The FY 2017 index was revised downward in response to a sharp increase in prices during 2018. The factors driving this apparent overheating were as follows:
+2
+1-10
-2
6
BIL IMMO index from Q4 2017 to Q4 2018
for economic activity as a whole. Year-on-year in Q4 2018, the acceleration was even greater (+16.2%) when compared with overall economic activity (5.2%) in terms of added value (at current market prices). An analysis by half year confirms this strong trend, with a rise of 13.6% between H2 2017 and H2 2018, whereas the same figure for overall economic activity was +6.6%. The construction sector may have had an exceptional year in 2018, but the STATEC indicator points to a significant albeit gradual drop in confidence from September 2018 onwards in terms of both activity and order books.
• Lastly, the number of building permits issued during Q4 2018 (2,029 dwellings) was considerably higher (+82.3%) than the figure for Q4 2017 (1,113 dwellings). The number of building permits rose so sharply because permits for 769 dwellings were issued in October 2018 in the capital and 249 in December. The average monthly figure for 2018 prior to this was just 50. The building permit to population ratio is therefore far from having a moderating effect on the index, given the relative stability of demographic growth (+2% in 2018 versus +1.9% in 2017).
12/2017 09/2018 12/201806/201803/2018
7
0.95
1.561.77
1.39
2.66
T1 T2 T3 T4 T1 T2 T3 T4 T1 T2 T3 T4 T1 T2 T3 T4 T1 T2 T3 T4 T1 T2 T3 T4 T1 T2 T3 T4 T1 T2 T3 T4 T1 T2 T3 T4 T1 T2 T3 T4 T1 T2 T3 T4 T1 T2 T3 T4
2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018
7,000 €
6,500 €
6,000 €
5,500 €
5,000 €
4,500 €
4,000 €
3,500 €
Marked discrepancies between the capital and other urban areasThe latest asking price data shows that the existing gap between the capital and other regions is widening. For instance, asking prices per square metre for apartments in the capital were 43% higher than the national average in Q4 2017 and 51% higher a year later; the average asking price rose by 19.6% from EUR 8,758 to EUR 10,471 per square metre. While asking prices should always be analysed with a certain degree of caution, this rise is clearly not trivial given that there are more listings in this segment in the capital than in the rest of the country. However, this number fell from 1,808 in Q4 2017 to 1,717 in Q4 2018, which represents a drop of 5% over a one-year period. The number of listings of apartments for sale in the capital therefore declined, although the drop was even sharper in the rest of the country (down 12.9% from 1,587 to 1,383). Prices in the other regions rose by 0.6% to 10.4%, with deviations from the national average ranging from -17% to -40%.
Overall, the clearest trend was a jump in prices per square metre for an apartment in the capital relative to the rest of the country, at +19.6% (+14.6% across the Centre-South as a whole) year-on-year in Q4 2018 versus +10.4% in the South, +7.4% in the Centre-North and under 3% in the other regions. Accordingly, apartments and houses in the capital are 51% and 78% more expensive than the national average, respectively. A number of factors fuelled this sharp rise in prices, including the much-discussed imbalance between supply and demand; however, 2018 saw prices for existing houses rise relative to new houses and there are several hypotheses as to why this may have occurred:
• Firstly, the effects of a legislative change to VAT in 2015 may have had a negative impact on the prices of new properties across the Grand Duchy and in the capital in particular, where there are a disproportionate number of new large-scale projects. Investors’ VAT rate rising from 3% to 17% may have dissuaded them from embarking on new projects. It stands to reason that the option to continue taking advantage of the reduced VAT rate on renovations may have boosted sales of existing dwellings, especially those with a prime location in Luxembourg City. It should be noted, however, that the tax authorities can decide to reclassify several renovations as one investment, which would no longer benefit from the extra-reduced VAT rate. This renovation incentive will undoubtedly boost the quality of properties on the market, but it also goes some way to explaining the marked upswing in prices within the existing property segment between 2015 and 2018: prices for existing apartments climbed by 29.1% versus 1.5% for the off-plan segment over the same period. Prices for apartments bought off-plan fell by 7.8% in Q4 2018, whereas those for existing apartments rose by 5%. This may indicate that prices for existing dwellings are catching up with those for new dwellings, as shown by this graph produced by Observatoire de l’Habitat (recorded prices at national level):
Sale price per m2 for apartments
Sources Observatoire de l’Habitat
However, this hypothesis should be tempered somewhat by the fact that the number of apartments sold off-plan in Luxembourg dropped from 605 to 309 between 2017 and 2018. This goes a long way to explaining the fall in average prices in the off-plan segment at national level. A lack of supply in the off-plan segment in the capital is boosting the appeal of existing properties and fuelling rapid growth in sales and prices, leading to a significant rise for the STATEC existing property index.
• Secondly, the hypothesis that the price rise can be attributed to a lack of supply is debatable. STATEC data shows that the growth in the volume of new apartment sales dropped from 8.1% per year between 2010 and 2014 to just 4.8% between 2015 and 2018. Meanwhile, annual growth in the number of notarised deeds in the "existing apartment" segment rose from 4.4% between 2010 and 2014 to 7.4% between 2015 and 2018. Overall, prices rose most in the existing apartment segment in which supply increased significantly, whereas the smallest rise was seen in the new apartment segment despite a drop in supply. Given that the price elasticity of demand for apartments in and around the capital is close to zero, a greater supply of apartments has not brought down the prices of existing apartments in the slightest. In fact, the opposite is true.
• Thirdly, the issue of mobility may also explain the growing divergence between the capital and the rest of the country. Pressure on the road network continues to mount, while the majority of jobs are still found in the capital and surrounding areas. The growing number of cross-border workers commuting to the capital is making journeys increasingly long and stressful. From an economic point of view, we can say that the price elasticity of demand increases as one approaches the German, Belgian and French borders because it is possible to buy considerably cheaper properties by crossing the border and driving a few kilometres. In other words, the price elasticity of demand is higher in the capital than it is in communes that are further away.
• Lastly, demand is more international in the capital and is becoming increasingly divergent from the rest of the country. Recent high-profile projects have shown that property developers are targeting high-income individuals and now think nothing of spending in excess of EUR 3,000 or even EUR 3,500/m2 on construction. This is because they know that the final sale price can easily be three times higher: EUR 10,000/m2 or more is becoming increasingly common. The average asking price per square metre for an apartment in the capital has just reached EUR 10,471. Prices are being boosted by improvements to services: car parks are becoming larger and more prevalent, more services are now on offer (concierge services, wine cellars, gyms, etc.) and architectural trends are keeping pace as designs become increasingly modern and higher-quality materials are used. Stronger price growth and the ability to optimise returns via an advantageous tax system are decisive factors despite the lower rental yields seen in the capital compared with the rest of the country.
To conclude, the BIL IMMO index reached a record high in Q4 2018. This is a sign of potential market overheating and suggests a contraction may be on the horizon in the short or medium term. The following phenomena have been observed:
Relative convergence between prices for existing and new properties, as shown by the STATEC house price index, which rose by 11.5% year-on-year in the existing apartment segment and by 5.5% in the new apartment segment. If we look at the smoothed annual index for 2018, however, the difference was not as great (+8.5% for existing apartments versus +5.6% for those bought off-plan).
The sharp rise in recorded prices per m2 for existing apartments was largest in the communes closest to Luxembourg City, where growth of over 15% was seen in 2018, although the figure was closer to 10% over the last three years. These growth rates are to be viewed with extreme caution because volumes are limited outside the capital and the quality of existing apartments can have a real impact. Nonetheless, price growth of 14.5% for existing apartments in the capital is further evidence that prices for existing properties are catching up with new properties partly because the latter are in short supply.
In terms of asking prices per m2, house prices in the Centre-North, house and apartment prices in the East, and apartment prices in the North grew by 1.6% in 2018, i.e. less than inflation. Meanwhile, apartment prices in the West rose by just 2.3%. We can thus surmise that the only real immediate risk factors are apartment prices in the Centre-North, Centre-South and South regions.
Given that the natural rate of price growth is around 4–5% per year, the increase in prices per m2 for existing properties in the capital (+14.5%) and surrounding areas could potentially lead to a price correction in the region of 5% for the segment in 2019/2020. The last such movement in the capital pushed prices down by 4.6% in 2009. There may be a natural slowdown in price growth in other regions, but a significant correction seems less plausible in the immediate term.
The risk to the off-plan segment is also greatest in the Centre-South, where prices have risen sharply despite sales volumes in the capital having halved. A slowdown is to be expected, particularly in the capital, but a contraction over several years is less plausible in this segment. Despite a 2.7% contraction in 2011, the capital saw an average annual increase of 6.2% in the prices of apartments bought off-plan between 2007 and 2018.
After 2018 brought a sharp increase in prices, mortgage volumes, building permits and construction activity, it stands to reason that our index would reach a record level suggesting that a price correction and a slowdown may occur over the coming quarters. However, our base scenario suggests that Luxembourg’s strong economic fundamentals should afford some protection against a possible contraction of around 5% on average over a one-year period (probably 2019 or 2020) before the country returns to a normal average growth rate of 4–5% over the following years.
Level 1
Level 2
Level 3
Level 4
Level 5
NORTH(=)
23,724 inhab (+2.1%)
WEST(=)
36,244 inhab (+2.4%)
CENTRE-NORTH(+1)
65,941 inhab (+2.0%)
CENTRE-SOUTH(+1)
235,599 inhab (+2.1%)
SOUTH(+2)
180,275 inhab (+2.0%)
EAST(=)
72,111 inhab (+1.4%)
Regional analysis
(...) Change in the risk level versus Q4 2017.
... inhab Population at 1 January 2019.
(... %) Growth between late 2017 and late 2018 .
Methodology
Due to a lack of specifically regional data, the regional analysis is based on a cross-analysis of the following variables:
• Demography: population and demographic growth
• Advertised asking prices for houses and apartments
• Advertised rental prices for houses and apartments
• Recorded sales prices per commune for new and existing apartments
The sources used are STATEC for demographic data, and Observatoire de l’Habitat for asking prices and rents.
Other regional factors such as economic strength, the number of listings and the number of residential buildings completed can also be taken into consideration if such data is available.
The regional analysis below is based on demographic data at 1 January 2018, and on asking prices up to Q4 2018, as well as recent changes therein. The price trend in each region is compared with the national trend, and this is checked against demographic growth. Risk levels are weighted from 1 to 5, to be interpreted as follows:
Level 1: negligible risk of short-term price contraction Level 4: medium risk of price contraction
Level 2: low risk of short-term price contraction Level 5: high risk of price contraction
Level 3: moderate risk of price contraction
On the scale proposed, if we exclude the Centre-South region, the risks are low to medium in the near term.
NORTH | Level 2
The North (23,724 inhabitants) is the least populated region in the country, however its population growth in 2018 (+2.1%) was very slightly higher than the national average (+2%). House prices are lowest in this region and the size of the market is very limited: the number of listings of houses for sale accounts for 5.8% (6.9% in Q4 2017) of the country’s total, while the percentage is 3.5% for apartments (4.6% in Q4 2017). The deviation from the national average has narrowed considerably in the past year for houses: whereas prices per m2 were 30% below the national average in Q4 2017, the difference fell to 19% in Q4 2018. Asking prices for houses have increased by 18.5% in terms of price per square metre, whereas apartment prices have only risen by 1.1% over the same period. We should also note that the price per square metre for rental apartments, which only account for 2% of national stock, has increased by 9.4%, whereas the average price has fallen by 3.5% as a result of the decrease in average surface area. In the main town (Clervaux), there seems to be no over-valuation or contraction, and the recent price trend explains why the risk level remains at 2.
CENTRE-NORTH | Level 4
The Centre-North (65,941 inhabitants) remains quite a sparsely populated region, with demographic growth (+2%) in line with the national average. In the key segment of houses for sale (16.6% of national stock), average prices rose by 9.2% but only by 0.3% per m2, which demonstrates the appeal of larger houses in this region. House prices per m2 rose from EUR 4,512 to EUR 4,526 and are very close to, although slightly below, the national average (-2%). Apartments in the Centre-North, which represent 11.3% of national stock, have seen their average price per m2 rise by 7.4%. They average out at 17% less expensive per m2 than the national average, and this gap has widened since last year (-13%) because of the larger price rise in the Centre-South. Rents per m2 for houses fell by 17.7% (although there were very few listings: 7.2% of national stock, or 29 houses in Q4 2018) and prices for apartments (3.6% of national stock, i.e. 130 listings) rose by 3.6% year-on-year. The town of Mersch saw a sharp increase in the price of existing apartments (+24% year-on-year), but this must be considered in light of the low number of notarised deeds (51). Even if the risk seems very localised, apartment prices in Mersch should be monitored and justify increasing the risk level to 4.
WEST | Level 2
The West (36,244 inhabitants) has the second-lowest population in the country, but it experienced the highest demographic growth in 2018 (+2.4%). Asking prices for houses and apartments are some of the lowest on the market, and only the North is more accessible. In addition, price discrepancies with the national average are growing. The price rise has been fairly limited for apartments (+2.3%) and house prices per m2 have fallen by 1.1% year-on-year. Asking prices for houses were therefore 22% lower than the national average in Q4 2018, whereas they had been 18% lower in Q4 2017. Moreover, apartment prices were 40% lower than the national level, compared with 33% a year earlier. In volume terms, the West accounted for just 12.8% and 4.1% (14.6% and 5.8% a year earlier) of listings of houses and apartments for sale, respectively, and numbers have fallen across the region. On the rental market, asking rents for houses per m2 increased by 2%, but were 30% below the national average, versus 31% a year earlier. Asking prices mostly stabilised and recorded prices seem to be falling after a steep climb, meaning the risk level for the West is still 2.
12
13
CENTRE-SOUTH | Level 5
The Centre-South (235,599 inhabitants) experienced demographic growth that was in line with the national average in 2018 (+2.1%). More than ever, the region is at the heart of the property market. It accounted for 60% (up 3.1 percentage points compared with the previous year) and 76.7% (versus 60.1% in Q4 2017) of rental house and apartment listings, respectively, 44.3% (up 2 percentage points) of listings of apartments for sale and 25% (down 2.1 percentage points) of listings of houses for sale in Q4 2018. Asking prices are still the highest in the country by far. Notable developments include the fact that asking prices per m2 for apartments continue to experience strong growth, having risen by 14.6% year-on-year. The capital alone is up 19.6%. House prices in Luxembourg City and across the region, which had increased sharply in 2016 and 2017, naturally slowed, with a more moderate rise of 5.5% in m2 year-on-year in Q4 2018. On the rental market, there was moderate growth in asking rents for houses (+3.1%; +7.6% in the capital) and a very sharp rise in rents for apartments (+14.7%; +15.5% in the capital). The risk level was thus raised to 5, on the basis that the recorded prices for existing apartments in the capital show unprecedented growth of +14.5% between 2017 and 2018.
EAST | Level 3
The East (72,111 inhabitants) had the lowest level of demographic growth in 2018 (+1.4%). There was an uptick in the number of properties listed for sale in Q4 2018; as a result, houses and apartments for sale in the region rose from 13.6% to 15.8% and from 4.5% to 6.8% of national stock, respectively, over a one-year period. Although historically below the national average, prices have been catching up. However, this momentum was lost in 2018 as price growth rates per m2 dropped below annual inflation. House prices per m2 only rose by 0.9% year-on-year, which was below the national average (+3.6%). Apartment prices per m2 rose by 0.6% year-on-year, which was a lot slower than growth seen in recent years and the national average (+13.2%). House rents per m2 are catching up with the national average (+9.8% year-on-year) and apartment rents per m2 rose by 13.3% year-on-year, although this was still below the national average of +19.8%. In light of the sharp decline in the rate of growth for asking prices and the somewhat negative trend for recorded prices in 2018, the risk level in relation to a price contraction remained at 3.
SOUTH | Level 4
The South (180,275 inhabitants) is the second most populous region of the country; demographic growth of 2% in 2018 saw it drop to mid-table after recording the highest rate of growth in 2017. If we compare sale prices, house prices per m2 are 11% below the national average and apartments are 24% lower. Asking prices for houses per m2 have therefore increased by 6.3% year-on-year, and apartment prices by 10.4%. In volume terms, the proportion of listings of apartments for sale in the region is down slightly (from 32.3% to 30.1% of national stock). The figure for rental apartments fell much more significantly (from 23.4% to 12.2% of national stock). For houses, the proportion of listings of houses for sale in the region rose (from 21.1% to 23.7% of national stock), as did the figure for rental houses (from 10.6% to 11.7% of national stock). The recent rise in recorded prices of existing properties since 2015 is noteworthy, while prices of new properties are growing in line with the national average. We are therefore raising the risk level to 4.
Data should be looked at cautiously as the sale prices and rents are those asked for, not necessarily those paid 3. Furthermore, the Luxembourg property market shows significant variation from one quarter to the next. Hence, recorded prices per commune make a useful addition to the analysis.
3 Source: Observatoire de l’Habitat
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Contact details
Are you looking to buy a main home or invest in rental property?
Call into one of our branches to find out about our various financing solutions, or contact us on (+352) 4590-3000 or at [email protected]
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(+352) 4590-4786
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(+352) 4590-3835
Hakim El Boazzati Corporate Advisor
(+352) 4590-2472
Pierre Rodenbourg Corporate Advisor
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