“This statement, whilst part of a climate of general tension, presents an overly simplistic view of an eminently complex situation,” say the promoters and developers in a statement, this Friday 11 April at midday. “The crisis facing the sector is first and foremost a crisis of confidence, fuelled by a combination of macroeconomic and structural factors: soaring interest rates, rising construction costs, difficulties accessing finance and significant regulatory uncertainty.”
“In this context, developers have not ‘refused’ to build: they have been forced to exercise caution in the face of an uncertain and unstable economic environment,” they go on to say. “It is important to remember that developers are among those who have borne the brunt of this crisis, absorbing cost increases, administrative delays and a freeze in solvent demand on their own margins--sometimes to the point of suffocation. In many cases, they have continued to move forward despite adverse conditions, keeping teams, projects and commitments afloat.”
More positively, they speak of a climate that is “beginning to change.” “Thanks to the measures recently put in place by the Luxembourg government--tax incentives, support for demand, adaptation of certain procedures--the curtain of uncertainty is beginning to lift. The end of the tunnel is within reach.” And they are calling on all the players in the market to “work collectively, with a clear objective: to restore the confidence of households and investors. It is crucial that we work together to define the right mix of structural and economic measures to create the conditions for a more fluid, balanced and sustainable housing market.”
“The developers’ section reiterates its commitment to a healthy, transparent and proactive market. But there can be no sustainable recovery without close cooperation between all the players: public authorities, the banking sector, local authorities, investors and developers. Rather than looking for those responsible, we are calling for a dynamic solution.”
In an interview on Monday, the CEO of the Luxembourg Bankers’ Association (ABBL) said that the fall in prices so far had been insufficient. “,” he stressed. Historically, the price difference between new builds (Vefa projects, or vente en l’état futur d'achèvement) and existing apartments was around 8%, but now it has surged to 28%, making it difficult for developers to sell their units.
This article was originally published in .