The number of residential building permits declined last year, marked by economic conditions, while the population increased at a faster rate than the year before, indicating housing market challenges. Library photo: Maison Moderne

The number of residential building permits declined last year, marked by economic conditions, while the population increased at a faster rate than the year before, indicating housing market challenges. Library photo: Maison Moderne

Since 2010, the annual average number of authorisations for new residential building units or dwellings in Luxembourg has been around 4,900 units, while the population has grown on average by 11,700, resulting in a challenging housing market for new arrivals. The number of authorisations dropped further than the average last year, the lowest level since 2017.

According to Statec, the grand duchy’s statistics bureau, only 4,709 new housing units were approved in 2022, a decline of 23% from the previous year, when 6,105 units were approved. In stark contrast, the number of residents increased by 10,667 individuals in 2022, nearly a 24% increase from 2021.

The slowdown in building permits was due to economic and political factors, such as high inflation and the rise in interest rates, said Statec.

The decline in demand for authorised building types was less severe for individual houses, which experienced a 9% decrease, compared to buildings with two or more dwellings, for which requests for authorisation dropped by 28%.

Interestingly, Luxembourg City experienced the largest decline in new building permits, with authorised dwellings dropping from 1,701 in 2021 to 772 in 2022, which is a reduction of 929 units, or a 55% decline. However, the city also recorded a net increase of 4,268 individuals in 2022, a 7% rise compared to 3,984 the previous year.

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