In 2024, Luxembourg’s real estate market reached a phase of price stabilization, setting the stage for a positive outlook in 2025. Market trends reveal regional variations and key opportunities for buyers and investors.
Market Trends in 2024
The Luxembourg real estate market in 2024 reflected a transition period, marked by the stabilization of prices across different property types. However, the variations between property categories and regions provided valuable insights into the evolving dynamics of the market.
Resale Homes and Apartments:
- Older Houses: Prices experienced a notable decrease of -2.6%, attributed to cautious buyer behavior in response to economic uncertainties and changing interest rates.
- Older Apartments: A smaller decline of -0.5% reflects sustained demand, especially in central urban areas where supply remains tight.
- New Apartments: Prices held steady with a minor dip of -0.3%, indicating resilience in this segment despite a limited volume of transactions.
Regional Variations
The contrast between regions highlights the importance of localized market factors:
- North: Apartment prices rose by +4.5%, driven by demand from buyers seeking affordable options outside the central areas.
- West: A significant decline of -6.4% in older house prices reflects oversupply and slower demand in this region.
- Centre: Modest growth of +1.2% for older homes underscores its appeal as a stable and premium area for buyers.
- South: Older apartment prices fell by -3.7%, suggesting buyers are gravitating toward new developments in other regions.
Rental Market
For the first time in several quarters, rental prices showed signs of easing:
- Houses: Average monthly rents decreased to €3,208 (-3.7%), following a period of consistent growth in previous quarters.
- Apartments: Rents dropped slightly to €1,824 (-1.9%), retreating from their peak of €1,860 earlier in the year.
Regional rental trends mirrored those of sales, with rising rents in high-demand zones like the Centre (+4.4%) and declines in less competitive areas such as the West (-4.2%).
The overall market stabilization in 2024 was supported by several factors, including the extension of fiscal incentives and a slight relaxation of interest rates. These measures encouraged renewed activity among buyers and laid the groundwork for an improving market in 2025.
Outlook for 2025
- Sales Market: Stability is expected across older homes and apartments, with potential for slight price increases. New apartment prices will likely remain steady due to limited sales volume.
- Rental Market: Regional adjustments will drive stabilization, with high-demand areas like the Centre showing moderate rental growth.
Opportunities for Buyers and Investors
The combination of fiscal measures and improving buyer confidence presents an ideal environment to secure properties before the market gains further momentum. Key regions like the North and Centre offer the best growth potential.
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