Rising mortgage rates are driving down average sale prices, while rental prices continue their upward trend, driven by strong demand and inflationary pressures. Photo: Matic Zorman / Maison Moderne

Rising mortgage rates are driving down average sale prices, while rental prices continue their upward trend, driven by strong demand and inflationary pressures. Photo: Matic Zorman / Maison Moderne

Residential real estate sale prices have experienced a 7.0% decline year-to-date as of September, while rental prices have climbed by 5.5% in the same period, according to recent data from Immotop.

Residential property prices in Luxembourg are witnessing a downward trajectory, according to the from the property listings site Immotop.

In September 2023, the average asking price for residential properties reached €8,373 per square meter, marking a 7% decrease compared to January 2023, when prices were at €8,574/m2. The market had reached its peak in July 2022, with an average price per square meter soaring to €9,208. However, prices have gradually receded since then, with September’s asking prices being the lowest observed since June 2021.

This decline in property prices implies a shifting market landscape, likely influenced by the and more , potentially dissuading potential buyers with lower creditworthiness.

Nonetheless, it’s worth noting that housing and apartment prices remain , outpacing general wage growth and inflation over the years. As of September 2023, prices still exhibited a 79% increase compared to September 2015.

In Luxembourg City, the average price in the third quarter of 2023 was €12,429/m2, 44% higher than the national average, with districts like Belair and Kirchberg exceeding this average at €14,536/m2 and €13,074/m2 respectively. However, Beggen and Dommeldange offered more affordable options within the city at €9,747/m2 and €9,785/m2 respectively.

Rental market

In contrast, rental prices in Luxembourg have continued their upward trajectory. As of September 2023, the average monthly asking price for residential properties stood at €25.42/m2, reflecting a 5.5% increase since the start of the year when prices were at €24.09/m2.

This upward trend signifies a growing demand for rental properties, potentially driven by factors such as , a , and , which have led to a 7.7% rise in salaries and pensions throughout the year.

September 2023 marked the peak of this trend, with the highest monthly average rental price recorded in the grand duchy, reaching €25.42/m2. In terms of rentals within the capital, the average rent reached €25.8/m2 in the third quarter of 2023.

Notably, September 2023 marked the highest monthly average rental price ever recorded. As a result, tenants may face challenges in finding affordable rental options.

The figures are all based on property listings posted on the Immotop.lu site.

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