What do you think of the latest reform announcements by the prime minister for the construction sector and the property market? : “Different types of reforms have been announced. First of all, there are the tax measures, which are designed to get the market moving in the short term. The first thing we’ve seen is a , as prices have fallen sharply. The delta between the old and the new had become almost non-existent, which is unusual because of the energy transition and the renovations that need to be carried out on older homes. New homes should be more expensive than old ones.”
“The second segment that is picking up is completed or almost completed homes. People can see what they are going to buy, and the mistrust of potential buyers, the fear of ’--without wishing to be negative--can be overcome with this type of product.”
“The third wave is that of VEFA [vente en l’état futur d’achèvement, or sale in future state of completion], which must absolutely be launched if construction companies are to have work. Here, activity is much more tentative. At Iko Real Estate, we have taken the risk of launching construction, even with a low level of pre-marketing. We have surrounded ourselves with a construction company with solid foundations and we have guaranteed the land to give buyers every possible comfort. We have also pre-sold a residence to the town of Esch-sur-Alzette. If we don’t want to be left behind, and the Rout Lëns district to be finished in 12 years’ time, we have to take risks and pre-finance part of it.”
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What do you think of the government’s non-tax measures?
“We were heavily involved in the discussion meetings, as we are founding members of the . A lot of work has been done in three months, with numerous meetings between all the parties involved, including ministries, local authority representatives and developers, to work on a different way of operating and shorten the periods needed to obtain authorisations; in other words, to simplify administration. The prime minister has announced 10 measures, which are included in the 39 measures we presented, most of which have been adopted. Multi-disciplinary working groups were set up, and the ministry of the interior was involved, as was the housing ministry.”
“We also came up with clear proposals to show how the private sector can help the public sector to work. Only together can we make progress on the housing problem. The public sector delivers around 500 homes a year, out of the 4,000 built in previous years, and the need is for around 6,000 new homes a year. We’re very pleased with the progress that has been made, even if there’s always more that can be done. We need to deliver housing and have construction companies that have work so that we don’t break our production tool.”
Is the end of building regulations at municipal level good news?
“It will certainly make the situation much clearer. We have a lot of regulations and interpretations of regulations, with a lot of work done by architects and designers that could be saved. So this will certainly help us to move faster. What’s very important is that we take a common basis, terminology and rules, but that each commune remains independent, because we don’t treat the city of Luxembourg or Esch like a small rural commune. Typicity will be respected. This is a very good measure.”
Do you plan to create experimental projects on public land?
“Rout Lëns is already in this spirit. We are experimenting on a large scale, with in particular. We have to be careful with experimentation, and our challenges mean that we have to be extremely careful about what we do. In energy, we have taken on a partner who knows what they’re doing. As for timber construction, this is an area in which we have a great deal of expertise, having delivered 10,000m2 of timber offices two years ago.”
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“Experimentation is in our DNA and we cultivate it. Our teams’ watchword is to incorporate innovation into every project. It can be small or very large, risky or not, but it always has to add quality.”
Are you already having problems finding companies to carry out your work?
“There are difficulties, that’s for sure. At Rout Lëns, we signed a Bouwteam contract worth around €250m, and small businesses are not consulted about contracts of this size. To meet our needs, we have to call on large companies, but behind these large companies, there may also be a whole series of subcontractors. Whenever possible, we also try to give work to small businesses, and we try to help companies that have been our partners for a long time, and whose work we know to be of high quality. It’s a form of loyalty to them. For us, at this stage, the situation is not blocking. But for the future development of Luxembourg, to achieve these 6,000 new homes per year, it is a strategic factor.”
Do you think we’ll manage to catch up on the backlog of deliveries over the last few months, or is what’s gone lost? “We have two backlogs: the backlog accumulated during the last two years of crisis, but also the backlog accumulated over the last 10 years, with almost 32,000 homes missing since 2010. highlights this. This backlog has been a major factor in driving up the price of new homes. We feel it when our employees are unable to find accommodation. The new measures, which are also designed to help employers facilitate housing for their employees, will certainly help too. In addition, the is good news. Everyone needs to do their bit to improve the situation and, above all, look to the long term rather than the short term.”
This article was first published in French on . It has been translated and edited for Delano.