A steep climb

Luxembourg real estate sector booming

As housing prices climb, so does the number of real estate businesses in Luxembourg Copyright (c) 2020 Azlan Stock/Shutterstock.  No use without permission.

As housing prices climb, so does the number of real estate businesses in Luxembourg Copyright (c) 2020 Azlan Stock/Shutterstock. No use without permission.

Luxembourg’s housing market is a lucrative business. With prices climbing steeply every year--there was a 16.7% increase between 2019 and 2020--many will try to profit from the occasion. In total, Luxembourg now counts 2,416 businesses in the real estate sector.

This was revealed in an answer to a parliamentary question by economy minister Franz Fayot (LSAP), small and medium enterprises minister Lex Delles (DP) and justice minister Sam Tanson (Déi Gréng). The answers distinguished three different types of real estate businesses, namely real estate agencies, property development and property management.

As evidenced by the ministries, the number of businesses in this sector have more than doubled in recent years: the number of real estate agencies went from 592 in 2005 to 1,221 in 2019. Property development businesses saw a similar growth, going from 503 in 2019 to 1,058 in 2019. Property management went from 63 businesses to 137 in that same time span.

The added value generated by these businesses also climbed over the years, going from a total of €234m in 2005 to €838m in 2019. The steep evolution is in part thanks to the real estate development’s jump from €390m in 2018 to €575m in 2019. The gross profit in 2019 for all three branches combined was €609m.

Naturally, the number of employees in the industry more than doubled over those 15 years: 1,686 were active in the sector in 2005, whereas in 2019 3,656 worked either for an agency (1,750), property development (1,520) or property management (386).

Bankruptcy cases—due to the suspension of payments or the collapse of a credit--remained proportionally low, with 21 cases in the real estate development sector in 2011 and 20 in 2020.