Prices of apartments and houses in Luxembourg at the end of 2021, +12% over one year, slightly slowing down.
The increase in Q4 is mainly due to apartments under construction (+7.7% over one quarter).
Apartments under construction cost on averagebetween 10 to 20% more expensive than in the existing one.
Average price of a house in the canton of Luxembourg: 1,450 million euros, almost double the price in the north of the country.
Summary on the evolution of rents
+ 53.2% increase in rents announced for apartments between 2010 and 2021 (+41.4% for houses).
Discrepancy between the changes in rents announced versus current rents prices due to the low adjustment of rents in Luxembourg (43% of the stock was re-adjusted between 2014-2018, Statec 2019).
Visible consequence on the effort rate of households according to the age of their lease: tenants in place for less than 5 years devote 39.7% of their disposable income to housing, compared to 34.5% for those in place for more than 5 years.
The average rental area has decreased since 2010, from 74m² to 61m², a decrease that is not found for apartments sold (-3m² in 11 years on average).
Studios now represent 30% of apartments rented compared to 10% in 2010.
The average increase in rents is also explained by location, 61% of apartments rented in 2021 are rented in Luxembourg compared to 44% in 2010.
Summary on differentiated trends in rents versus selling prices
Increase in advertised rents +4%/year on average between 2010 and 2021 when the price of apartments increased by +7.2% on average over the same period.
Increase in selling prices due to investors’ appetite for the Luxembourg market and the increase in the solvency of buyers.
Appetite stimulated by housing taxation, historically low credit rates and the extension of repayment maturities and of course the good economic and demographic health of Luxembourg.
However, supply remains inelastic due to difficulties in mobilizing land reserves.
Finally, the rental market is constrained by the incomes of tenants, which are growing at a slower pace than those of landlords.