Luxembourg property market: stabilisation and increased activity
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The third quarter of 2024 was a period of recovery in the completed housing market, with flat sales up 44.2% on the same period in 2023 and house sales up 64%. This growth shows the return of buying activity after a significant decline last year. However, sales of flats under construction (VEFA) remain at an extremely low level, with just 144 transactions, almost four times lower than the average activity over the 2017-2022 period.
Property prices are showing stability. The Statec composite price index rose 0.2% over the quarter and the year-on-year decline was only 1.7%.
- Secondary market apartments: minimal declines of 0.1% for the quarter and 3.6% for the year, indicating a steadier trend after sharp falls at the end of 2023.
- Home: price growth of 2% for the quarter and stabilization for the year (+0.3%).
- Apartments under construction: 2.5% price decline over the quarter, but the data remains volatile due to a small number of transactions.
Rental prices continue to rise, up 3.6% year-on-year, despite a small decline in the quarter (-1.6%). This exceeds annual inflation, which stood at 1.6%. The dynamic is particularly noticeable in the furnished room segment (+4.5% year-on-year), which now accounts for around 17% of the rental market.
Interestingly, the growth of rental rates for new contracts significantly outpaces the rate of rent increase in current contracts (+1.7% over the year). This is explained by the general inflationary trend and changes in supply.
