Land prices near Luxembourg are 6 times higher than on the outskirts of the country
Maria Ziegler, Unsplash
The Luxembourg Housing Observatoire de l'habitat (Observatoire de l'habitat) regularly analyses the evolution of building land prices. These prices have a significant impact on housing costs, making them a key economic indicator. The report, based on a hedonic valuation model, presents a land price index that neutralises changes in the transaction structure and tracks the real market dynamics.
The analysis showed that the price of a plot per ar (100 m²) depends on several key variables:
- The characteristics of the site itself: its area, shape, and whether it belongs to the "Baulücke" category (urban infill).
- Urban planning information: zoning and permitted development parameters in accordance with local urban plans (PAG and PAP "Nouveau Quartier").
- Transaction date: Land prices have risen sharply between 2020 and 2022.
- Location: Luxembourg maintains a monocentric property market structure, where prices are concentrated around the capital and gradually decrease with increasing distance from it.
The most important finding of the report was the confirmation of significant differences in land values between different regions of the country. In Luxembourg City, land remains the most expensive, while in the north of the country prices are minimal. The difference between these zones reaches a sixfold gap.
This gap highlights the structural features of the country's property market: strong demand in the capital continues to push prices upwards, while the less developed infrastructure of the northern regions limits land values.
The Luxembourg real estate market remains tightly centralised, resulting in significant inequalities in land prices. This not only reinforces the imbalance in housing affordability, but also emphasises the need for a spatial redistribution of development that could balance housing demand across the country.
