Q1 2025: Towards a gradual recovery in selling prices and a rebalancing of the rental market

The first quarter of 2025 marks a turning point for the Luxembourg property market, with a slight recovery sales prices and adjustment in the rental market as a result of marked increasee sales in the last quarter of 2024.

After a phase of stabilisationprices for existing homes are up increase by +3.51TP3Q compared with the previous quarter, confirming renewed interest in this segment. The market for existing flats remains generally stable (+0.11TP3Q), while new flat sales continued to rise. an upward trend (+1.2%). These trends will need to be monitored over the coming months to assess their impact. sustainability. The average price of an old house in Luxembourg, all surface areas combined, is €5,905/m², and that of an old flat is €7,790/m².

A sales market that varies from region to region

In the space of a year, house prices have risen by increased in several areas, notably in the East, Centre and South, where the request remains strong. On the other hand, prices of old flats are down slight fallsexcept in the east and north, where a increase has been observed. In the case of new flats, the market is showing signs of recovery. Contrasting trends prices decrease the country as a whole, with the exception of the south, where the trend is more marked. stable. These trends reflect a readjustment market and a increased pressure on older homes, reflecting the return of buyers to this type of property.

The rental market: rents begin to fall

The drop rents, which began at the end of 2024, will continue to be confirms in the first quarter of 2025. House rents have risen drop by -1.81TP3Q, compared with the previous quarter, while rents for flats are down by back (-2.5%). This decline reflects a rebalancing of the rental market, with supply adapts After a period of tension, rents are gradually coming into line with demand. The average rent for a flat in Luxembourg is €1,779/month, while the average rent for a house is €3,152/month.

Varied regional trends

Variations in rents are highly dependent on the region. The East is recording a strong increasewhile the Centre is pulling the national trend downwards bottomwith a decrease rents. The West is also experiencing a drop rents, while the south and north of the country continue to see a downward trend. bullish. These regional differences reflect local dynamics and adaptation the market to the new balance of supply and demand.

Favourable conditions for continued recovery

In this context, the extension tax measures in force continues to support the property market. At the same time, interest rates remain competitivecontributing to a more dynamic favourable for buyers. Taken together, these factors suggest that the recovery that began in 2024 will continue, with the sales market growing steadily. progress over the last 4 quarters and a rental market that adjusts gradually.

Sales: slight rise in prices, momentum to be confirmed in the next quarter

Change in advertised sales prices per square metre per quarter

After a period of stabilisationprices for existing homes are up slight increase this quarter (+3.5 1Q3 compared with Q4 2024). In the case of existing flats, the market remains broadly flat. stable (+0.1 1Q3), while the trend for new flats continued unabated. slightly up (+1.2 1Q3Q). We will be watching these trends over the coming months to see if they are confirmed.

Trends in advertised selling prices per square metre by region: a market of contrasts, marked by rising prices for older homes

Prices of older homes continue to rise increaseThis is particularly true in the east, centre and south of France. Conversely, prices of old flats down slightlyexcept in the east and north, where the are progressing. As for new flats, they recorded significant fallsespecially in the West and East, while the South remains more dynamics. These trends reflect a market in readjustmentwith a request increased for older houses.

Rentals: a confirmed fall in rents at the start of the year

Change in advertised rents per quarter

After a rise in 2024, rents for houses back off for the second consecutive quarter (-1.81TP3Q compared with Q4 2024). Flat rents, meanwhile, continued their upward trend. dropwith a more marked (-2.5 %), confirming a adjustment of the rental market. These trends reflect a gradual rebalancing after several successive increases.

Trends in advertised rents by region: marked variations

Rents in Luxembourg vary from region to region. Some areas, such as the South and the North, are experiencing a increaseOthers, notably the Centre, are pulling the overall trend downwards with a decrease more marked in flat rents. The West also recorded a drop rents, while the South and North continued on a downward trend. upward trend. These variations reflect changes in demand and the local dynamics specific to each region.

Taxation: 2025 tax: ceilings and interest deductions for principal residence

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