As inflation has marked the second quarter of 2022, housing has also been among the casualties of soaring prices. Overall, the amount charged for accommodation has increased by 11.5% between April and June compared to the same period in 2021. Existing apartments have become 9.1% more expensive and have seen a drop of 5.9% in transactions. The price of new apartments has similarly gone up by 9%, but the number of transaction in this bracket has dropped by 17.1%. Existing houses have become 15.5% more expensive in the second quarter of 2022 compared to the same period in 2021.
New is better and more expensive
The overall increase in housing prices “constitutes a slight acceleration compared to the previous quarter but remains largely below the rates observed over the two previous years,” Statec in its report.
The most notable quarter-on-quarter increase in the second quarter of 2022 was that of existing houses, which rose by 2.8%. The value of apartments under construction rose less rapidly (+0.5%) compared to that of existing ones (+2.6%). On average, a flat under construction is 5% to 15% more expensive than an existing property of a similar size, estimated Statec.
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Location, locaton, location…
As ever, location plays a key role in the evaluation of real estate. In the municipality of Luxembourg City, the average price of a house was estimated at €1,595,000, almost double the average price in the north of the country.
The annual increase in the price of land set aside for real estate has increased on average by 8.1% from 2010 to 2021. This accumulated to a 136.5% rise in price over the 11 years period. The overall amount charged for accommodation in 2021 rose by 13.9% compared to the previous year. In 2020, the average recorded annual increase was 14.5% and in 2019, it was 10.1%.
With making accommodation more affordable firmly among the state’s priorities, housing minister (déi Gréng), in May, said that , adding that he wants this sum to reach €500m in the future.