Residential property prices in Luxembourg are witnessing a downward trajectory, according to the latest data from the property listings site Immotop.
In September 2023, the average asking price for residential properties reached €8,373 per square meter, marking a 7% decrease compared to January 2023, when prices were at €8,574/m2. The market had reached its peak in July 2022, with an average price per square meter soaring to €9,208. However, prices have gradually receded since then, with September’s asking prices being the lowest observed since June 2021.
This decline in property prices implies a shifting market landscape, likely influenced by the ascent of mortgage rates and more stringent lending criteria, potentially dissuading potential buyers with lower creditworthiness.
Nonetheless, it’s worth noting that housing and apartment prices remain elevated and overvalued, outpacing general wage growth and inflation over the years. As of September 2023, prices still exhibited a 79% increase compared to September 2015.
In Luxembourg City, the average price in the third quarter of 2023 was €12,429/m2, 44% higher than the national average, with districts like Belair and Kirchberg exceeding this average at €14,536/m2 and €13,074/m2 respectively. However, Beggen and Dommeldange offered more affordable options within the city at €9,747/m2 and €9,785/m2 respectively.
In contrast, rental prices in Luxembourg have continued their upward trajectory. As of September 2023, the average monthly asking price for residential properties stood at €25.42/m2, reflecting a 5.5% increase since the start of the year when prices were at €24.09/m2.
This upward trend signifies a growing demand for rental properties, potentially driven by factors such as population growth, a highly mobile workforce, inflationary pressures and three salary indexations in 2023, which have led to a 7.7% rise in salaries and pensions throughout the year.
September 2023 marked the peak of this trend, with the highest monthly average rental price recorded in the grand duchy, reaching €25.42/m2. In terms of rentals within the capital, the average rent reached €25.8/m2 in the third quarter of 2023.
Notably, September 2023 marked the highest monthly average rental price ever recorded. As a result, tenants may face challenges in finding affordable rental options.
The figures are all based on property listings posted on the Immotop.lu site.