Engel & Völkers Licence Partner Luxembourg > Blog > Unabated high demand on the Luxembourgish real estate market

Unabated high demand on the Luxembourgish real estate market

After months of uncertainty due to changing opening strategies and curfews, it is clear that the COVID-19 pandemic has permanently changed the residential property market, price levels have established themselves at a high level and further price increases are to be expected. The pandemic has significantly increased the need for a safe investment. This brings with it a renewed increase in demand for residential property.

A trend that is also confirmed by the study recently conducted by Engel & Völkers Luxembourg. Here it becomes clear that since the outbreak of the pandemic, in addition to the 47.1% of respondents who already own their own home, a further third (34%) are now also looking for their own property. This result is astonishing in view of the significant rise in property prices in Luxembourg.
- Has the pandemic influenced people's attitude towards home ownership?

There are different reasons for this trend: Due to the pandemic, many of the respondents have developed the desire to have a garden. Currently, 90% of the participants already live in a property with an open space, of which 46% have a balcony and 44% have a terrace. However, when asked about the preferred way of living, the picture clearly shifts towards a house with a garden. 

- How would you prefer to live?

This is not really surprising after the last few months. Due to the different corona measures and contact restrictions of the last year, many long for more outdoor space. Especially for families with children, private retreats in the countryside, as well as a larger living space became very important. The results prove that this is a long-term trend and that the desire for more space in and around the home has increased. This will also have an influence on urban planning and new developments in the medium and long run.

Another reason for the significantly stronger demand for residential property is the change in space requirements. Not only outdoors, but also in residential areas, this has increased significantly in recent decades. The realisation that the pandemic will last for a longer period of time, as well as the increased shift to home office and schooling, have contributed to the need for more space per person in households. Suddenly, additional rooms are needed to maintain the same level of living comfort.
In addition, living comfort has become more important, precisely because people are spending more time at home. This also became clear in the study conducted by Engel & Völkers. Many participants place greater value on cosiness and order in their own homes. Furthermore, a well-equipped kitchen has become more important to many, where they can follow their culinary hobbies. On the whole, Luxembourgers tend to optimise their living situation in recent months.

The demand for residential property and the refurbishment of existing properties is additionally fuelled by the low interest rate level. Many use the increase in profits from their existing property as a multiplier for the proof of equity to buy a larger property in order to satisfy the need for more space and open areas.
For 44% of those surveyed, the desire for more security lies behind the motivation to buy. Slightly more than half think more rationally and would buy a property for investment purposes. Real estate continues to be regarded as a safe investment and the growth rates of recent years speak for themselves.
- Why would you like to buy a property?

In summary, the third part of the Engel & Völkers study in Luxembourg has also shown that demand for residential property is at an all-time high and prices continue to rise steadily in line with the low supply and high demand. The trend towards more open spaces and a greater need for space will permanently change the residential property market as well as urban development. Many customers are looking for a safe haven for their assets in real estate, while for others emotional reasons are at the forefront of the purchase decision.

Our current listings that satisfy the desire for a bigger garden and more space:

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Engel & Völkers
Licence Partner Luxembourg

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