Luxembourgers are buying less and less property, but prices are still rising

In the second quarter of 2022, residents of the Grand Duchy were less likely to buy a home, according to a recent study. At the same time, prices continued to rise. Although not as fast as in the previous quarter. A joint study of the housing market was published by Statec and Observatoire de l’habitat.

The researchers note that market analysis in the third quarter of 2022 should show dramatic changes. Right now only the data up to April was analysed. That is, data before a sharp increase in mortgage rates.

The decrease in purchasing activity in the housing market is observed everywhere, but it has especially affected old houses and housing sold before building completion. Sales of the latter decreased by 17.3% compared to the second quarter of last year.

At the same time, prices for old houses increased by 11.5% compared to the spring of 2021. New and under construction housing has risen in price by 9.1% and 9% respectively. And yet the rental price increased only slightly, 1.2% in a year.

The average price of an “old” square meter in the country is €8799, while a “new” one will cost an average of €9472.

Since the start of the decade, housing in Luxembourg has risen in price by 12-15% annually. At the same time, in 2020-2021, overall market inflation was relatively low at 2%. Therefore, the current rise in prices by 11.5% despite 7% inflation is a noticeable slowdown in growth.