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In Luxembourg1.14 million euros to buy a house
LUXEMBOURG – According to a report published on Tuesday, real estate prices for purchase increased by 5.6% in the last quarter of 2022. A rise certainly, but less pronounced than usual. Tenants are not spared.
This is almost good news as real estate prices are fueling tension. In the fourth quarter of 2022, housing prices experienced “a marked deceleration compared to previous quarters”. This is what emerges from a report published Tuesday morning by Statec and the Observatory of Habitat. On average, these property prices increased by 5.6% over the quarter, up but less than usual. We even have to go back five years, to the second quarter of 2018 precisely, to find traces of the latest trend of its kind in the Grand Duchy.
In detail, the price of old housing increased by 4.4% over the period, that of new apartments by 9.4%, old houses by 3.8%. The deceleration observed in the fourth quarter of 2022 reinforces that generally observed over the entire year. “Over the whole of 2022, house prices increased by 9.6% compared to the previous year. The average annual increase was 13.9% in 2021, 14.5% in 2020 and 10.1% in 2019,” the report notes.
New tenants have to pay more
Although prices have risen less in recent months, they are still very high. Count 11,946 euros per m² on average for an apartment under construction of less than 50 m2. And 1.14 million euros on average for the purchase of a house, an average which rises to almost 1.6 million euros in the canton of the capital. Luxembourg City, Bertrange and Strassen are the most expensive municipalities for the sale of existing apartments. “The Grand Duchy of Luxembourg is historically a territory strongly polarized by its capital, the main pool of jobs, activities and services. The housing market is also, as a result, very strongly influenced by the capital”, develop Statec and the Observatory of Habitat.
Prices which have had a strong impact, moreover, on the market in 2022. “Activity is generally down sharply compared to the fourth quarter of 2021”, underlines the report. 1,269 apartments were sold over the last three months of last year, that’s 30.4% less over one year. Between the end of 2021 and the end of 2022, the number of apartments under construction sold (389) fell by 48.3%. “The level of activity has really plunged since the middle of 2022”. With 639 units sold between October and December 2022 in the country, the housing sector is also impacted, -25.4% over one year.
Finally, for tenants, the situation also remained very tense. Rents for houses (+4.8%) and apartments (+2.1%) continued to rise sharply at the end of 2022 for new rental contracts, following an almost continuous trend since 2010.
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