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Everything you need to know before buying real estate is included in our Luxembourg Property Pack
As of June 2025, the average house price in Luxembourg stands at €8,373 per square meter nationally, with Luxembourg City commanding significantly higher prices at €12,106 per square meter.
The Luxembourg real estate market continues to present a complex landscape for both investors and homebuyers, with property prices varying dramatically between regions and property types. While national prices have stabilized following a slight decrease of 5.1% year-on-year, the market remains one of Europe's most expensive, with total purchasing costs including fees and taxes adding another 10-15% to property prices.
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Luxembourg property prices average €8,373/m² nationally, with Luxembourg City at €12,106/m² and northern regions offering better value at €5,812/m².
Total costs including taxes and fees add 10-15% to purchase prices, while mortgage rates range from 3.16% to 3.78% depending on term length.
| Region | Average Price (€/m²) | Property Type Focus |
|---|---|---|
| Luxembourg City (Belair) | €14,489 | Premium apartments & houses |
| Luxembourg City (average) | €12,106 | Mixed residential |
| Esch-sur-Alzette | €7,375 | Apartments & family homes |
| Diekirch (North) | €6,744 | Houses & rural properties |
| Wiltz (North) | €5,038 | Budget-friendly options |
| National Average | €8,373 | All property types |
What's the current average price for buying a house in Luxembourg?
The current average price for buying a house in Luxembourg stands at €8,373 per square meter nationally as of Q1 2025.
Luxembourg City commands significantly higher prices, with an average of €12,106 per square meter, making it one of Europe's most expensive real estate markets. The most premium districts within the capital reach even higher levels, with Belair leading at €14,489 per square meter, followed by Gasperich at €12,787 per square meter.
Regional variations are substantial across the Grand Duchy. Esch-sur-Alzette, the country's second-largest city, shows more moderate pricing at €7,375 per square meter as of May 2025. The northern regions offer the most accessible entry points, averaging €5,812 per square meter, with Diekirch canton at €6,744 per square meter and Wiltz representing the most budget-friendly option at €5,038 per square meter.
These prices reflect a market that has stabilized after experiencing a 5.1% year-on-year decrease in Q1 2025, though the Luxembourg residential market remains relatively stable compared to Q4 2024. The pricing structure demonstrates the significant premium commanded by Luxembourg City due to its status as a major financial center and the concentration of international businesses and institutions.
It's something we develop in our Luxembourg property pack.
How do prices differ between property types, like apartments, detached houses, and new builds?
Property type significantly impacts pricing in the Luxembourg real estate market, with apartments typically commanding higher prices per square meter than houses.
Apartments across Luxembourg show a median price of €812 per square foot (approximately €8,740 per square meter), while houses average €577 per square foot (approximately €6,210 per square meter). This price differential reflects the higher demand for apartments in urban centers, particularly Luxembourg City, where space is at a premium and proximity to business districts is highly valued.
Detached houses generally command higher total prices due to their larger size and land component, but their per-square-meter cost is typically lower than apartments in prime urban locations. The price advantage becomes more pronounced in suburban and rural areas where land availability is greater and construction costs are relatively lower.
New builds carry a significant premium across all property types, typically selling 10-20% higher than comparable existing properties. This premium reflects modern construction standards, energy efficiency features, and contemporary amenities that appeal to today's buyers. New developments in emerging neighborhoods like Gasperich and Kirchberg particularly benefit from this premium, as they combine modern construction with strategic locations.
What are the average prices per square meter in different areas, like Luxembourg City, Esch-sur-Alzette, and the northern countryside?
| Area | Apartments (€/m²) | Houses (€/m²) | Notes |
|---|---|---|---|
| Luxembourg City | €11,035–12,106 | €9,000–14,000 | Premium districts: Belair, Gasperich, Kirchberg |
| Esch-sur-Alzette | €7,375 | €6,000 | Grenz: highest; Dellhéicht: lowest |
| Diekirch (North) | €6,300 (est.) | €6,744 | Highest in northern region |
| Wiltz (North) | €5,200 (est.) | €5,038 | Most affordable option nationally |
| Northern Average | €5,812 | €5,812 | Best value for money region |
What are the most expensive areas to buy in, and which neighborhoods are considered up-and-coming or budget-friendly?
The most expensive areas in Luxembourg are concentrated in Luxembourg City's premium districts.
Belair leads as the most expensive neighborhood at €14,489 per square meter, followed by Gasperich at €12,787 per square meter and Kirchberg at €12,542 per square meter. These districts command premium prices due to their proximity to the financial district, excellent infrastructure, and high-end amenities. Ville Haute, the historic upper city, also ranks among the most expensive areas due to its prestigious location and cultural significance.
Up-and-coming neighborhoods present excellent investment opportunities for those seeking future appreciation. Kirchberg continues to develop with modern infrastructure and maintains high rental demand from the international business community. Gasperich is experiencing rapid development with new residential and commercial projects. Luxembourg-Gare benefits from ongoing rehabilitation projects and excellent proximity to the city center, while Hollerich is transforming from an industrial zone into a modern residential area with new tram access improving connectivity.
Budget-friendly options are primarily found in the northern regions, particularly Wiltz, which offers the lowest prices nationally at €5,038 per square meter. Dudelange and certain areas of Esch-sur-Alzette, particularly the Dellhéicht neighborhood, provide affordable alternatives. Even within Luxembourg City, Beggen offers more accessible pricing due to its distance from the city center, though it still provides good connectivity to urban amenities.
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How much does the total cost come to including notary fees, registration taxes, agency fees, and renovation if needed?
Total costs for purchasing property in Luxembourg extend significantly beyond the advertised price, typically adding 10-15% to your investment.
Notary fees constitute approximately 1% of the purchase price, while registration tax adds 6% and transcript tax contributes another 1%. For a typical €750,000 property, these mandatory costs total €60,000 before any available tax credits. The registration tax can be reduced through various government incentives, particularly for first-time buyers or energy-efficient properties.
Agency fees typically range from 3-5% of the purchase price, depending on the property value and agency involved. These fees are negotiable and may vary based on market conditions and the complexity of the transaction. Some buyers choose to work directly with sellers to avoid agency fees, though this requires more personal involvement in the process.
Renovation costs vary significantly based on property condition and buyer preferences. Energy-efficient upgrades are increasingly popular and supported by Luxembourg's "Energy Coach" services, which provide both technical guidance and potential financial incentives. Basic renovations might add €10,000-30,000, while comprehensive modernization projects can exceed €100,000 for larger properties.
It's something we develop in our Luxembourg property pack.
What mortgage conditions can buyers expect right now, and how much is the monthly payment for a typical purchase?
Current mortgage conditions in Luxembourg reflect a stabilizing interest rate environment as we reach mid-2025.
Fixed-rate mortgages offer varying terms with corresponding rates: 3-5 year fixed rates average 3.16%, 10-15 year fixed rates stand at 3.67%, and 25-30 year fixed rates reach 3.78%. Variable rates currently average 3.51%, providing some flexibility for borrowers who anticipate rate decreases. These rates represent a stabilization from the volatility experienced in previous years.
Monthly mortgage payments for typical purchases average €3,980 for a three-bedroom house, significantly higher than average rental costs of €2,634 for comparable properties. This 51.1% premium of mortgage payments over rent reflects the substantial price gap between buying and renting in the Luxembourg market. The gap demonstrates the significant financial commitment required for homeownership in the country.
Lenders typically require a minimum 20% down payment for residential properties, though some institutions may offer higher loan-to-value ratios for well-qualified borrowers. Income requirements generally follow the standard that monthly mortgage payments should not exceed 35-40% of gross monthly income, though banks may be more flexible for borrowers with substantial assets or stable employment in Luxembourg's financial sector.
How have property prices in Luxembourg changed compared to 1 year ago and 5 years ago?
Luxembourg property prices have experienced notable changes over both recent and medium-term periods, reflecting broader European market trends.
Year-on-year comparisons show a 5.1% decrease in property prices per square meter in Q1 2025 compared to Q1 2024. This decline represents a market correction after years of sustained growth and reflects both interest rate impacts and improved supply conditions. The House Price Index showed a more modest 1.4% year-on-year change as of December 2024, down significantly from the 5.5% growth rate experienced in late 2022.
The five-year perspective reveals dramatic price appreciation, particularly in urban centers, despite recent stabilization. Property prices experienced substantial growth through the late 2010s and early 2020s, driven by Luxembourg's economic growth, population increases, and limited housing supply. The market reached peak growth rates around 2021-2022 before moderating through 2023 and into 2024.
This price evolution reflects Luxembourg's transition from a period of rapid appreciation to market stabilization. The recent price moderation has created more favorable conditions for buyers, particularly first-time purchasers who were previously priced out of the market. However, prices remain at historically high levels, maintaining Luxembourg's position among Europe's most expensive property markets.
What are the forecasted trends for real estate prices in Luxembourg over the next 1, 5, and 10 years?
Real estate price forecasts for Luxembourg indicate a period of stabilization followed by moderate growth across different time horizons.
Short-term forecasts for the next year suggest continued price stabilization with slight regional variations. Interest rates are stabilizing, creating more favorable conditions for buyers and potentially supporting modest price recovery in prime locations. Some areas may experience slight decreases while others see modest growth, resulting in a relatively flat national average with improved market accessibility.
Medium-term projections over the next five years anticipate moderate price growth supported by continued demand, limited supply, and government initiatives. However, affordability challenges will likely constrain rapid price increases. The Luxembourg residential market is expected to see annual growth rates in the 2-4% range, significantly lower than the dramatic increases of previous decades. Policy interventions and demographic changes may influence these trends.
Long-term outlook over ten years suggests sustained demand driven by demographic growth, economic stability, and limited land supply. Luxembourg's position as a financial center and its continued population growth from international migration support long-term demand. However, policy interventions aimed at improving affordability and potential market corrections may moderate growth rates, keeping them in line with broader European trends rather than the exceptional growth previously experienced.
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If you plan to live in the property, what are the best value-for-money options available today?
Best value-for-money options for owner-occupiers focus on emerging neighborhoods and regions offering growth potential at accessible prices.
Regional value opportunities are strongest in the northern areas, particularly Wiltz and Clervaux, where prices remain significantly below national averages while maintaining good connectivity to major employment centers. Dudelange and specific areas of Esch-sur-Alzette, particularly the Dellhéicht neighborhood, offer substantial savings compared to Luxembourg City while providing access to urban amenities and transportation links.
Within Luxembourg City, Beggen presents the most accessible pricing option while maintaining reasonable connectivity to the city center. The neighborhood offers a suburban feel with easier parking and more space for families, making it particularly attractive for those prioritizing space over central location. Transportation connections remain adequate for commuting to the financial district.
Emerging neighborhoods like Gasperich and Hollerich provide excellent long-term value through their ongoing development and infrastructure improvements. While current prices may be higher than outer regions, these areas offer potential appreciation benefits combined with improving amenities and transportation access. Renovated properties in these up-and-coming areas often provide better value than new constructions while offering customization opportunities.
If you're buying to rent out, what are the returns like on short-term rentals vs long-term rentals?
Rental investment returns in Luxembourg vary significantly between short-term and long-term strategies, each offering distinct advantages and challenges.
Long-term rentals provide more stable and predictable returns with lower operational costs. Net yields typically range from 2-6%, depending on location and property type. The Luxembourg rental market benefits from strong demand from expats and international business professionals, ensuring consistent occupancy rates and stable rental income. Long-term rentals also face fewer regulatory restrictions and require less hands-on management.
Short-term rentals can generate higher gross yields, potentially reaching 8-15% in prime locations, but face higher operational costs and greater regulatory risks. Net yields after accounting for management fees, cleaning costs, utilities, and vacancy periods can actually be lower than long-term rentals, particularly in highly regulated urban areas. The short-term rental market also requires more active management and marketing efforts.
Luxembourg's rental market generally favors long-term strategies due to stable expatriate and business demand, consistent occupancy rates, and fewer regulatory complications. The country's position as a financial center ensures steady demand for quality rental properties from international professionals seeking stable, long-term accommodation. This demand pattern makes long-term rentals more attractive for most investors seeking predictable returns.
It's something we develop in our Luxembourg property pack.
What kind of profits can you expect if you plan to buy, renovate, and resell the property later?
Buy-renovate-resell strategies in Luxembourg face significant tax implications that substantially impact potential profits.
Capital gains tax rates are substantial, reaching 24.94% for residents (23.87% from 2025) and 17% for non-residents (16% from 2025), plus additional surcharges. These high tax rates significantly reduce net profits from property flipping or short-term renovation projects. The tax burden makes quick turnaround projects less attractive compared to longer-term investment strategies.
Renovation can add significant value, particularly for energy-efficient upgrades that qualify for government incentives and appeal to environmentally conscious buyers. Properties with improved energy ratings command premium prices and may qualify for tax benefits. However, renovation costs must be carefully calculated against potential tax liabilities to ensure profitability.
Reinvestment strategies can help defer tax liabilities through like-kind exchanges or rolling proceeds into new property acquisitions. This approach allows investors to continue building wealth while minimizing immediate tax impacts. The strategy works particularly well for investors committed to long-term property investment rather than one-time profits.
Market volatility adds another layer of risk to renovation projects, as property values can fluctuate during renovation periods. Current market stabilization provides more predictable conditions, but investors should account for potential market changes when planning renovation timelines and budgets.
How does the average house price in Luxembourg compare with other similar European cities like Zurich, Brussels, or Amsterdam?
| City | Average Price (€/m²) | Market Position |
|---|---|---|
| Zurich | €17,501 | Higher than Luxembourg City |
| Luxembourg City | €8,400–12,100 | Among Europe's most expensive |
| Amsterdam | €6,000–8,000 | Lower than Luxembourg City |
| Brussels | €3,500–5,000 | Significantly lower than Luxembourg |
| Luxembourg National | €8,373 | High by European standards |
Conclusion
This article is for informational purposes only and should not be considered financial advice. Readers are advised to consult with a qualified professional before making any investment decisions. We do not assume any liability for actions taken based on the information provided.
As of June 2025, Luxembourg continues to rank among Europe's most expensive property markets, with prices stabilizing after recent corrections but remaining substantially higher than regional neighbors.
The market offers opportunities for both investors and homebuyers, particularly in emerging neighborhoods and northern regions, though total costs including taxes and fees require careful budgeting for successful property acquisition.
Sources
- Spuerkeess - Luxembourg Property Market Momentum
- Chronicle.lu - Luxembourg Property Prices Q1 2025
- Immotop.lu - Esch-sur-Alzette Prices
- Immotop.lu - Northern Luxembourg Prices
- Properstar - Luxembourg House Prices
- Global Property Guide - European Price Comparison
- Expatica - Best Luxembourg Neighborhoods
- Nextimmo - Luxembourg Investment Areas
- BLLLD - Hidden Property Costs Luxembourg
- Credihome - Current Mortgage Rates