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Luxembourg residential property prices have been rallying since the beginning of 2016, according to a recent report issued by Banque internationale à Luxembourg. Photo: The capital’s Grund area is seen in this November 2011 picture by Dennis Keller (CC BY 2.0). 

That is according to the most recent “Bil Immoindex”, produced by Banque internationale à Luxembourg and the consultancy PwC.

The index runs on a scale from -3, for “cooling down”, to +3, for “overheating”.

At the end of December 2016, the index stood at +1.80, the bank said on 18 July 2017. That is a rise from +1.58 in the second quarter of 2016, and a big gain from +0.87 in the fourth quarter of 2015.

The bank’s Marcel Leyers stated in a press release:

“The index more than doubled between end-2015 and end-2016, powered by rising housing prices and the credit boom. Although it is on the verge of overheating, the market’s ascent is underpinned by solid fundamentals: a growing population and a robust national economy. An increase on the supply side, rather than a decrease in demand, would serve to slow the rise and help move the IMMOindex closer to an equilibrium.”

The Bil Immoindex is published every six months for institutional and individual investors. The most recent edition, written in June, is available on Bil’s website.