Real estate

Pandemic pushed up property prices outside Luxembourg City

Buyers are looking for more space, driving up prices outside of the capital city Photo: Matic Zorman / Masion Moderne

Buyers are looking for more space, driving up prices outside of the capital city Photo: Matic Zorman / Masion Moderne

The pandemic has contributed to price increase in areas outside of Luxembourg City as demand increased for properties with gardens and outside spaces, a report published on Thursday says.

Real estate company Engel & Völkers in a market analysis said that prices in Mersch, for example, went up by around 62% between 2017 and 2021, with the increase becoming sharper starting 2020 when the pandemic broke out.

While a house in 2019 cost €1.1m on average, this is now at €1.4m. Prices also rose rapidly in Walferdange (50%), Steinsel (45%) and Lorentzweiler (39%). “We have seen a big increase in the demand for houses and apartments along the A7 motorway between the city and Ettelbrück/Diekirch,” said Raymond Klein, team leader at Engel & Völkers Luxembourg.

Asking prices for existing apartments on average rose by 13.5% and for houses by 12.5%, according to analysis by the real estate company. This largely matches data from Statec published earlier this year, with said prices rose 13.9%.

Engel & Völkers expects prices to keep rising although at a slower pace. Inflation and interest rates will impact prices, the company said. “Furthermore, banks are obliged to be more conversative on the valuation of private used properties,” it said in a statement.

“For a very long time we haven’t seen this many variables influencing the property market so directly and strongly. No one is able to forecast the mid- and long-term development of the market at this moment,” said Philipp Niemann, managing director at Engel & Völkers.