What are the Trends in the Luxembourg Property Market?

The Luxembourg real estate market in the first quarter of 2024 shows a significant trend of price adjustment compared to the previous year. This development affects all regions of the country, with a general decrease in prices of about -9.3%.

Sale Price and Interest Rates

Sale prices in the Luxembourg real estate market continue to adjust, stimulating renewed activity in real estate transactions. After hovering around 4.5% to 5%, interest rates have seen a significant decline, marking a first since the onset of the crisis in 2022. Recent observations from atHome Finance reveal rates ranging between 3.5% and 3.8%.

Central Banks and financial institutions in Luxembourg anticipate several further declines in the coming months, which could accelerate the expected recovery of the real estate market by 2024-2025.

Importance of Energy Passport

The energy passport of a real estate property plays an increasingly crucial role in determining interest rates by banks. Properties with high-performance energy passports (A, B) generally benefit from preferential interest rates compared to other properties in the market.

Some banks even go as far as offering a reduction in interest rates if buyers commit to undertaking energy renovation works, capable of altering the energy classification of the real estate property.

Evolution of Rental Prices

After a period of strong increases in 2023, the rental market shows signs of stabilization. The rise in rents, overall, has significantly slowed down in the first quarter of 2024, with the national average increase not exceeding +1.7%.

However, this moderation manifests differently depending on the types of properties: apartment rents show an increase of +2.5%, while house rents experience a decrease of -6.2%.

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