Real estate prices boom continues in Luxembourg (Tageblatt.lu)

Flats are getting more and more expensive in Luxembourg. Statec* has recorded a significant price increase, especially for newly constructed buildings. Luxembourg City and the surrounding municipalities are the most expensive areas in the country.

Year over year the average purchase price of a home has increased by 3.8 percent in the second quarter 2014. This emerges from a study carried out by the Statec. In the first trimester, the increase stood at 3.3 percent. People wanting to buy a newly constructed unit in the first quarter of this year had to pay 1.7 percent more than a year ago. This moderate price increase is explained by the Statec with the high number of cheaper construction projects running in the southwest of the country. In the second trimester, however, prices rose strongly again, it is emphasized. As for older buildings, the annual price increase stands at a whopping 5.8 percent in the first quarter 2014. In the second trimester the same figure has fallen to 3.5 percent. The general construction price, excluding the price of land, has increased this year compared to the previous year by 2.1 percent.

Fewer applicants for newly constructed buildings

The massive price increase has meant that fewer new apartments are sold. In the second quarter 2014, the number of transactions has decreased by 16.1 percent compared to the same period last year, the Statec reports. Paradoxically, an increase has been registered in the number of building permits granted by the country’s municipalities. As for existing dwellings, the number of sales contracts has increased in one year by only 8.9 percent.

The average selling price of an existing apartment between 1 July 2013 and 30 June 2014 stood at € 337.546. This accounts for approximately € 4,230 per square meter. For newly constructed buildings, the average investment required stood at € 425,989 (i.e. € 5,265 per square meter).

More distance = lower price

The most expensive apartments are located in Luxembourg City. There the average price per square meter for an existing dwelling stands at € 5,264 and it moves up to € 6,586 for a newly constructed apartment. The further you move away from the capital, the more prices fall. In Esch-sur-Alzette the prices per square meter stand at € 3,842 and 4,289 for existing and newly constructed dwellings, respectively. The lowest prices are recorded in the north and northeast of the country. The most expensive towns are Luxembourg City, Bertrange, Kopstal, Sandweiler and Strassen. There the costs for an “old” apartment exceed € 4,800 per square meter. In Wiltz and Clervaux this price drops below € 3,000 per square meter.

Small apartments whose areas cover less than 50 square meters cost more per square meter (€ 4,719) than apartments with an area exceeding 130 square meters (€ 3,852).

 
In a European comparison prices rise in Luxembourg while they fall in the euro zone as the Statec reports. However, there are differences as you analyse the situation in each country. Between the first trimesters of 2007 and 2014, the Statec has registered a price increase of 25 percent in Luxembourg. Prices in Belgium have increased as well, but less rapidly than they have done in Luxembourg. In Germany real estate prices have been increasing continuously since 2012 whereas in France they are sinking.

*Luxembourg national statistical office