Q2 2025: Confirmed recovery in selling prices and new momentum in the rental market

The second quarter of 2025 saw a continuation of the recovery that began at the start of the year, with an increase in selling prices and a turnaround in the rental market. This trend is indicative of a revival in activity, even if the dynamics continue to vary according to segment and region.

On the sales front, prices for existing homes are up significant increase (+4.01TP3Q compared with the previous quarter), confirming their role as the driving force behind the recovery. Older flats are also continuing to increase (+3.71TP3Q), while new flats posted the biggest increase (+6.1%). The average price of an old house is €6,138/m², compared with €8,077/m² for an old flat.

Sales still driven by older homes

The upward trend can be seen across the country, with some significant increases for existing houses in the west and south of France (+6.6% in one year). Older flats show stronger growth moderatelyThis is despite a fall in the West (-2.01TP3Q). New flats show Contrasting trends These include a sharp rise in the West (+10.5%), a moderate rise in the South (+3.6%) and a fall in the East (-6.5%). These differences reflect differentiated market dynamics by segment and by zone.

The rental market is on the up again

After several quarters of decline, rents go to in the second quarter of 2025. Houses record a strong growth (+8.8% compared with the previous quarter), followed by flats (+4.2%). This trend can be explained in particular by a request always supported in the most sought-after areas, such as the Centre and certain nearby municipalities. The average rent for a flat is €1,854/month, compared with €3,430/month for a house.

Marked regional disparities

House rents increase in the Centre (+6.4%) and the South (+2.8%). As for flats, the Centre stands out with a moderate increase (+1.8%), while cuts are appearing in the east and south. The request relatively more important in the Centre, combined with its attractivenessis helping to drive down the general trend in rents. increase.

A still buoyant environment for buyers

Despite the expiry of certain tax incentives on 30 June, schemes such as the "Bëllegen Akt"or the deduction of loan interest remain in force and continue to support projects. With falling ratesThese are helping to maintain a certain momentum. The coming months should confirm the trends seen over the first six months.

For sale : upward trend in sales prices confirmed

Change in advertised sales prices per square metre per quarter

The increase prices, which began in the previous quarter confirmsThis is a positive sign for the property market as a whole, due to renewed interest on the part of buyers. Old houses (+4.0%), old flats (+3.7%) and new flats (+6.1 %) are all on an upward trend. increase. We'll be watching closely to see if this trend continues in the second half of 2025.

Trend in advertised selling prices per square metre by region: upward momentum intensifies, driven by older homes

Old house prices increase This was particularly the case in the west and south of France, with a marked increase of +6.6 1Q3 in one year. Existing flats are developing more moderatelywith slight rises except in the West, where they were back off by -2.0 1Q3. New flat prices vary by region, against a backdrop of continuing transaction volumes limited These include a sharp rise in the West (+10.5 %), a moderate increase in the South (+3.6 %) and a fall in the East (-6.5 %). This dynamic confirms a global increase in posted prices, driven mainly by older homes.

Location : a recovery in rental income after several quarters of decline

Change in advertised rents per quarter

After several quarters of decline, rents leave clearly to the increase in the second quarter of 2025. House rents have risen sharply increase (+8.8 1Q3Q), while flat prices are also back on the rise. increase (+4.2 1Q3Q) compared with the previous quarter. This trend reversal marks a possible restart of the rental market, after a sharp downturn since mid-2024. This upward trend should be followed closely in the months ahead.

Change in advertised rents by region: rental trends vary from region to region

Rents are not rising uniformly across the region. The Centre stands out with a sharp rise for houses (+6.4 1TP3Q over 12 months) and a moderate increase flats (+1.8 1Q3). The West recorded a significant increase rents (+6.5 1Q3). In contrast, the East recorded a sharp drop homes (-7.2 1TP3Q) and the North back off (-4.2 1TP3Q). The South remains more stablewith moderate variations depending on the type of property. These variations can be explained by regional disparities in terms of demand, supply and attractiveness.

Taxation and financing

A still buoyant environment despite the end of certain subsidies

Since 1st July 2025A number of exceptional tax measures put in place to support the Luxembourg property market have taken effect. endHowever, some key forms of support remain in place and continue to benefit homebuyers.

These include the tax credit forBëllegen Akt"remains in full force. It allows reduced registration fees up to 40 000 € per person, i.e. up to 80 000 € for a couple, for the purchase of a property intended to become their principal residence. This scheme is now the the main fiscal lever still in place to reduce acquisition costs.

In addition, the tax deductibility of mortgage interest remains applicable as part of the annual tax return, in accordance with the rules in force. This interest can be partially or fully deducted, depending on the year in which the property is made available, enabling households to reduce their overall tax burden.

Despite the disappearance of certain temporary aids, these mechanisms still in place contribute to maintain an environment favourable for property purchases, particularly for primary residences. In this way, they are supporting the recovery seen since 2024.

Sources: taxx.lu - chd.lu

Contrasting situations depending on the type of interest rate

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