Luxembourg property market: demand exceeding supply despite pandemic

Luxembourg City, the capital of the Grand Duchy of Luxembourg, is the largest city in the country with a population of around 122,000. 70 percent of residents here are foreign nationals. Besides boasting impressive countryside and a wealth of culture, Luxembourg is also famous for being the seat of key European institutions including the European Court of Justice. The property market in Luxembourg is still witnessing a high level of demand, met with a low availability of properties. “Buyers appreciate the high quality of life on offer, as well as the economic and political stability, and the geographical proximity to Belgium, France and Germany. Luxembourg is a sought-after investment location among young professionals, families and businesspeople,” says Philipp Niemann, Managing Director of Engel & Völkers Luxembourg.

Hamburg - Engel & Völkers is currently brokering this exclusive residence near Wiltz, spanning some
580 square metres overall, for 2.55 million euros. (Image source: Engel & Völkers Luxembourg)

Top prices per square metre of up to 15,000 euros

Even during the coronavirus pandemic, prices remain at a high level. The districts of Limpertsberg, Belair and Kirchberg rank among the most sought-after addresses. But the centre of the capital is also very popular. In prime locations, top prices of up to 4 million euros were fetched for premium detached and semi-detached houses in 2020. Freehold apartments in the same locations sold for up to 15,000 euros per square metre. The average price for properties is around 1.8 million euros. The majority of prospective buyers are from Belgium, France and Germany. They are increasingly looking for high-quality, contemporary penthouses overlooking the city, as well as for prestigious mansions outside Luxembourg City offering ample privacy and large grounds.

Outlook: Privacy more important than ever 

Based on the continuing excess level of demand on the property market, Engel & Völkers expects prices to remain stable in the future. Clients in Luxembourg tend to prefer buying to renting. According to a Eurostat report, approximately 86 percent of Luxembourg citizens between the ages of 20 and 64 have private ownership of their home. The ownership rate was even higher in the 55 to 64 year old age bracket, where some 9 in 10 citizens live in a property they own. “In recent months we have noticed that our clients are increasingly looking to properties in more rural areas. It is often here that better value for money can be found in terms of living space and plot sizes. Many people are now working from their home office and will continue to do so more and more in the future. An additional room, and a large garden or a terrace have become important criteria when deciding to buy,” Philipp Niemann reveals.

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