This has not happened since 2015. In the last quarter of 2022, house prices in Luxembourg fell by 1.4% compared to the previous quarter, according to the latest figures released by Statec on Tuesday 28 March. In the fourth quarter of 2015, the fall was only 0.2%. To find a bigger quarterly drop, one has to go back to the first quarter of 2014, when it was 1.5%.

The price of old houses fell by 1.9%, existing houses by 2.3% and existing flats by 1.4%.

The price index for flats under construction decreased by 0.3%.

+5.6% from the end of 2021 to the end of 2022, +9.6% over the whole year 2022

Comparing the prices of the fourth quarter of 2022 with those of the same period in 2021, these have still increased by 5.6%. In one year, they have increased by 4.4% for old flats, 9.4% for new flats and 3.8% for houses. This is a “clear deceleration compared to the previous quarters,” writes Statec. One has to go back to the second quarter of 2018 to find a lower annual development of 5.1%.

Over the whole of 2022, house prices rose by 9.6%.

In 2021, it was +13.9%, in 2020 +14.5% and in 2019 +10.1%. However, the average annual variations were less significant before that (+7% in 2018, +5.6% in 2017).

These figures correspond to the house price index, calculated by Statec on a “constant quality” basis, i.e., neutralising changes in the structure of the properties sold.

On average, one square metre costs €8,734 for an existing apartment and €9,347 for an apartment under construction. The average price of a house is €1.144m. It even climbs to €1.59m euros in the canton of Luxembourg.

Transactions down by 14.4% over the year

As far as transactions are concerned, the latest figures also confirm the difficulties of the sector. These have been highlighted in recent months by several professional federations, such as the craftsmen’s federation and the Chamber of Trades at its general meeting on Monday 27 March. , about which are underway.

1,269 flats were sold in the fourth quarter of 2022, which is -30.4% compared to the same period in 2021. The financial volume of these transactions fell by 32.5% to €843m. Transactions fell by 17.8% in one year for existing flats (880) and by 48.3% for those under construction (389).

House sales (639) fell by 25.4% and the related financial volume by 25.8%. 429 transactions concerned building land (-29%), for a less marked drop in financial volumes of 4.9%.

In total, 5,850 transactions were carried out in 2022, a fall of 14.4%, for €3.9bn (-10.8%).

Tenants hit by inflation

While advertised rents (before possible negotiations) have risen less quickly than housing prices in recent years, the trend seems to be reversing, according to Statec. “We are seeing early signs of rents rising on new leases at the end of 2022.” They rose by 2.1% in one quarter and 8% in one year for flats and by 4.8% in three months and 6.9% in twelve months for houses.

“The increase in rents announced undoubtedly reflects a shift in demand from home ownership, made more difficult by the sharp rise in interest rates, to renting,” analyses Statec. However, it wants to reassure tenants, since it is “impossible to imagine rent increases as strong as the price increases we have experienced.” The institute explains that these increases had been fuelled by the fall in interest rates and the lengthening of credit terms, which is not expected to happen in the rental market.

Statec adds that the increase in lease rentals is more moderate, at 2% in one year.

This Tuesday at 19:30, follow live organised by the Paperjam + Delano Business Club in the presence of representatives of the political parties present in the Chamber of Deputies, including the minister for housing,  (Déi Gréng). The debate will also include (DP), Max Leners (LSAP), (CSV), Roy Reding (ADR), (dei Lénk) and Chloé Timmermann (Piratepartei).

The debate will be broadcast live on our website.

This story was first published in French on . It has been translated and edited for Delano.