What is the outlook for the residential real estate market in this new year? According to the experts of the Engel & Völkers group, it seems that the Luxembourg residential real estate market has a bright future ahead of it. Now is the time to unveil its main trends for this new year.
A price increase supported by Brexit
This year again, we expect residential property prices to rise by around 5%. The imbalance between housing supply and demand is expected to continue to increase. It is mainly due to the arrival of foreign workers on the Luxembourg market.
In 2019, this wave of migration is expected to become even more significant with Brexit. At the moment, many English companies have already confirmed their willingness to set up in Luxembourg. Indeed, investors point out that the expected returns in Luxembourg are more secure and significantly higher than those in neighbouring capitals. The fallout on the residential real estate market is the result of the arrival in Luxembourg of workers from the City.
However, the supply of new housing does not keep pace with this population growth. At present, we believe that the population influx should at least double the forecast for new projects. In short, a trend that helps to support the increase in residential property prices in Luxembourg.
The most popular and promising locations
During 2019, the most popular and therefore most expensive locations in the country will remain the beautiful districts of Luxembourg City: Limpertsberg, Belair, Kirchberg, Grund and Merl.
In addition, the south of the country is also accelerating its development.
On the western side, the municipality of Steinfort has a bright future and should benefit in the near future from its many investments in infrastructure projects.
Finally, we clearly feel a development of the North of the country. Real estate prices are the most affordable there at the moment, but we note a sharp increase in 2018 that is expected to increase further in the coming years. The main reason for this impetus is the development of the road transport network.
The municipalities in the north that are currently experiencing the strongest development are Ettelbruck, Diekirch and Wiltz.
The development of public transport and its free use
The free access and development of the public transport network throughout the country will certainly help to maintain the attractiveness of the properties located near this network. As a result, we expect a significant increase in the price of the goods concerned.
2019 will definitely be the year of Brexit. Negotiated or re-voted? In any case, many companies have already planned their relocation to Luxembourg, thus draining a large influx of people for our country. In summary, the major trends we are forecasting for 2019 further strengthen the determinants in favour of real estate investment in the Grand Duchy of Luxembourg, a pioneering country that has already proven its leadership in many areas.