Prices stabilised in 2024 and an encouraging outlook for 2025

In 2024, the Luxembourg property market experienced a phase of price stabilisationalthough some Contrasting trends by sector and by region.

Published prices for older homes rose drop by -2.6 % compared with the end of 2023, while prices for existing flats rose by relative stabilitywith a moderate decrease by -0.5 %. Prices for new flats remained stablesales, with a slight fall of -0.3 % over the last twelve months (and limited sales volume). These trends are set against a backdrop of extension of favourable tax measures real estate transactions and lower interest rates decided by the ECB and the FED. These adjustments, following a long period of rate hikes, have already begun to take effect. supporting demandwhich is a signal encouraging by 2025.

Regional disparities remain marked. In the north of France, prices of old flats have increased by +4.5 %, while in the West, prices of existing homes rose by back off by -6.4 %. The Centre recorded a slight increase prices of existing houses (+1.2 %), while prices of existing flats rose by moderate decline in the south (-3.7 %). Nationally, the average price for all types of property combined was €7,785 per sq. m, with a range of signs of stabilisation.

In the last quarter, the rental market a first price cut after several consecutive quarters of increases. House rents slightly reduced to €3,208/month (-3.7 % compared with Q3 2024), while flat prices fell down by -1.9 % in Q4 2024 to €1,824/month, after peaking at €1,860/month in Q3 2024. However, there are regional differences. Some areas, such as the Centre, recorded increases (+4.4 % over 12 months for flats), while the West recorded adjustments (-4.2 % over 12 months for flat rents).

In 2025, the property market is set to continue the recovery that began in 2024, with the outlook varying from one segment to another. Older houses and flats should stabiliseeven experience a slight increase over the course of the year.

The market for new flats is picking up gradually is expected to see no significant change in prices in the short term.

What would be the conditions for a recovery in the new-build market, involving a return to investment? Julien Licheron, Economist at LISER and the Observatoire de l'Habitat, replies: "Firstly, a return of confidence in the players and in the market, no doubt a prolonged easing of interest rates that would reduce uncertainty, and probably a fall in selling prices that would bring these prices closer to those of existing flats".

The rental market should also improve stabilisewith local adjustments in the most sought-after areas.

Lastly, the extended tax measures and lower interest rates should support positive impact on business, contributing to an favourable environment for the property market in 2025, despite certain economic uncertainties.

Sales: stabilisation over 2024 and lower prices in the second half of the year

Change in advertised sales prices per square metre per quarter

The sales price curves show a continuous and moderate decline prices for existing houses and flats, since the peak observed in the second quarter of 2024. At the same time, prices for new flats are experiencing variations but remain fairly stable over the year. These trends point to a market that is stabilises gradually.

Trends in advertised sales prices per square metre by region: a market of contrasts

At the end of 2024, sales prices vary The situation varies greatly from region to region. While the North and Centre are experiencing slight increasethe West and the East are marked by cuts. These trends reflect a market in readjustmentwith local dynamics influenced by supply and demand in each zone.

Rent: an end to rent rises?

Change in advertised rents per quarter

House rents, after peaking earlier in the year, are now in the doldrums. slight decline at the end of 2024. Flat rents, meanwhile, which have been rising throughout the year, are now for the first time on a downward trend. a slight fall this quarter, while remaining stable overall (+3.0% over 12 months). These recent developments could indicate a general trend towards a price stabilisation on the rental market.

Trends in advertised rents by region: marked variations

Rents in Luxembourg vary but this varies markedly from region to region. While some areas, such as the north, east and centre of France for flats, are seeing a rise in prices, others are seeing a fall. moderate increasesother regions, such as the West, are experiencing cuts. These trends reflect local dynamicsDemand is stronger in regions with growth.

Property purchasing power in Luxembourg

The graph below shows the evolution of property purchasing power in Luxembourg since 2019, i.e. the period since the start of the year. average areaexpressed in square metres, that a Luxembourg households with a median income can acquire with a mortgage. The differences are marked between regions. The North, South and East have the greatest purchasing power. superior than the national average, while the Centre region stands out for having more accessible land than the rest of France. reduced. However, there has been a increase purchasing power throughout the country in 2024.

Interest rates are currently falling

What the experts say