LUXEMBOURG Trends and Developments Contributed by: Torsten Sauer and William Tanguy, Norton Rose Fulbright
Norton Rose Fulbright 16 Boulevard Royal L-2449 Luxembourg Tel: +352 285 7391 Fax: +352 28 57 39 201 Email: luxreception@nortonrosefulbright.com Web: www.nortonrosefulbright.com
Transaction volumes The number of transactions in the real estate market as a whole showed a mixed trend. The Luxembourg Times reported that property sales saw a significant jump in the third quarter of 2024, with a total of 1,139 residential properties sold, marking the highest quarterly number since 2022. However, according to JLL, the take-up of office space slumped to its lowest level since the middle of the eurozone crisis in 2011. The STATEC report from September 2024 indi - cated that the number of transactions for exist - ing houses increased by 44% compared to the previous year. In contrast, the market for off-plan apartments (VEFA) remained sluggish, with only 154 transactions recorded in the second quar - ter of 2024. This represents a significant decline from the pre-crisis average. Due to weak transaction volumes and higher interest rates in 2024, it should also be noted that some real estate developers and construc - tion companies continue to face financial difficul - ties (and there have been some bankruptcies). This may impact the VEFA market in the future, in terms of potential consolidation of the market on the one hand and customer confidence on the other hand.
Market Overview 2024: A year of recovery and adjustment The Luxembourg real estate market in 2024 was characterised by a gradual recovery from the downturn experienced in the previous years. After a period of declining prices and reduced transaction volumes, the market began to show signs of stabilisation with some limited growth in certain sub-sectors. Price movements Despite this overall gradual recovery, the price of residential properties, including houses and apartments, experienced a notable decline. According to the Luxembourg Times, the cost of homes of almost all types fell throughout the year, although prices stabilised in the final quar - ter. The National Institute of Statistics and Economic Studies in Luxembourg (STATEC) report from September 2024 highlighted that the price of existing houses decreased by 9.9% compared to the second quarter of 2023. The index for apartments being built off-plan (VEFA) saw a smaller year-on-year decline of 4.3%. This trend was attributed to high borrowing costs and the overall economic environment (see also the sec - tion on economic factors below).
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