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In Luxembourg“Some real estate agencies will not last more than six months”
LUXEMBOURG – The tensions on the Luxembourg real estate market are causing concern among some players in the sector.
The Luxembourg real estate market is plunging several players in the sector into uncertainty.
What if real estate agents were put on partial unemployment? The idea is gaining ground, since the Luxembourg market experienced a significant slowdown in 2022. The fall in sales volume, partly due to inflation and the sharp rise in interest rates in recent months, raises the concern of many professionals in the sector.
“Some agencies are very affected by the market situation, where we can observe a drop in demand of around 80 to 90% and therefore a significant drop in transaction volume for several months” explains Julien Feld, manager team leader at Kw Select.
A situation also pointed out by the president of the Chambre Immobilière du Luxembourg, Jean-Paul Scheuren, who is asking for a job retention plan (PME), a measure requested as a preventive measure and one of the instruments of which is the Partial unemployment. “The situation is not yet dangerous, but we must be prepared for very adverse months,” explains Jean-Paul Scheuren.
Lack of buyers and difficulties in selling
The difficulties of certain agencies, whose total number is estimated at nearly 1,200 by STATEC, lead them to review some of their commercial practices. Thus, sharing of commission between agencies that have a buyer and those that have a property are more and more frequent, priority being given to the sale.
“Before, the demand was so strong that the agency that owned the property had no interest in collaborating so as not to share its commission. Today, we are seeing a change at this level, due to the lack of buyers and therefore the difficulty of selling” adds Julien Feld, of Kw Select. The latter even fears that certain small independent agencies, depending on their cash flow and because of the significant structural costs “cannot last more than six months” in the current context.
