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Yes, the analysis of Luxembourg City's property market is included in our pack
Thinking about buying a 3-bedroom apartment in Kirchberg? It’s a great area, but you're probably wondering: is now the right time to buy, or should you wait for prices to drop?
And what about long-term investment—should you look into other districts like Limpertsberg or Belair where property values might appreciate more over time?
In this article, we’ll answer these questions. We know this market quite well - and we have put all our knowledge in the Luxembourg Property Pack.
Will property prices increase in Luxembourg City in 2025?
Yes, property prices in Luxembourg City are expected to rise in 2025, driven by a combination of high demand and a limited supply of housing.
Backed by our fresh, in-depth market analysis, we’re confident that Luxembourg City remains one of the most attractive cities in Europe for both domestic and international investors.
While there are some economic challenges like inflation and rising interest rates, the main drivers behind Luxembourg City's price growth remain strong.
Demand, especially in the prime central areas, continues to outstrip supply, making any major price dips unlikely. Additionally, Luxembourg City's status as a financial and political hub continues to attract buyers from around the world.
Signals pointing to a property price increase in Luxembourg City
Here are some factors suggesting prices could increase:
The ongoing shortage of housing construction permits means fewer new developments will hit the market, particularly in highly sought-after areas. With demand remaining steady, this continued lack of supply will likely push up prices, especially in the city’s central districts.
Luxembourg City's strong economic performance and low unemployment rates are expected to continue into 2025, providing residents with the financial stability needed to invest in property, thereby driving up demand and prices.
The city is experiencing a growing influx of expatriates and international professionals, attracted by its thriving financial sector. This demographic shift is expected to bolster demand for housing, particularly in premium areas, leading to higher property prices.
Government initiatives aimed at improving public infrastructure and transportation are set to enhance the city's connectivity and livability, making it an even more attractive place to live and invest, which could drive property prices higher.
Luxembourg City's reputation as a safe and stable environment continues to attract high-net-worth individuals seeking secure real estate investments, further increasing demand and supporting price growth.
Signals pointing to a property price decrease in Luxembourg City
Here are some factors suggesting prices could fall:
Rising inflation and living costs are putting pressure on household budgets, potentially reducing the purchasing power of middle-income buyers and dampening demand for lower and mid-tier properties.
Higher mortgage interest rates, which have increased from the historically low levels seen in recent years, are making it more challenging for buyers to secure affordable financing. This could particularly impact those looking to purchase second homes or investment properties, potentially cooling off demand in the broader market.
Potential regulatory changes aimed at cooling the housing market, such as stricter lending criteria or increased property taxes, could deter some buyers and investors, leading to a slowdown in price growth.
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If property prices go up in Luxembourg City, how much would they increase by?
If real estate prices in Luxembourg City were to rise in 2025, the increase would likely be around 3% to 7% of their 2024 values.
Typically, real estate in stable, mature markets like Luxembourg City appreciates by approximately 2% to 7% annually over the long term. However, fluctuations can occur depending on factors such as region, season, and property type.
It means that, if you spot a charming 2-bedroom apartment in Kirchberg for 850,000 euros today, don't be surprised if it's priced between 875,500 and 909,500 euros this time next year.
To give you a better understanding, here is a table that shows 7 types of Luxembourg City real estate properties, their estimated prices in 2024, and projections for 2025 based on potential price increases of 2%, 5%, and 7%.
| Type of Property | Average Price in 2024 (€) | Price in 2025 (2% increase) | Price in 2025 (5% increase) | Price in 2025 (7% increase) |
|---|---|---|---|---|
| Modern Apartment (60 sqm / 646 sqft) | €900,000 | €918,000 | €945,000 | €963,000 |
| Contemporary Apartment (75 sqm / 807 sqft) | €1,200,000 | €1,224,000 | €1,260,000 | €1,284,000 |
| Luxury Penthouse (100 sqm / 1,076 sqft) | €2,500,000 | €2,550,000 | €2,625,000 | €2,675,000 |
| Studio (30 sqm / 323 sqft) | €450,000 | €459,000 | €472,500 | €481,500 |
| Loft (80 sqm / 861 sqft) | €1,600,000 | €1,632,000 | €1,680,000 | €1,712,000 |
| Townhouse (150 sqm / 1,615 sqft) | €3,500,000 | €3,570,000 | €3,675,000 | €3,745,000 |
| Investment Property (50 sqm / 538 sqft) | €750,000 | €765,000 | €787,500 | €802,500 |
Everything you need to know is included in our Property Pack for Luxembourg City
If real estate prices go up in Luxembourg City, which areas are likely to see the biggest increases?
Today, people who want to move to Luxembourg City desire the charm of its historic quarters, but they also seek modern conveniences and vibrant social scenes, which Grund delivers. Hence, we could see a price increase there in 2025.
Also, lately, there's been a shift toward more youthful, vibrant neighborhoods, and Clausen has really taken off.
We like it when information is clear and easy to digest. So, here’s a table that highlights the areas where prices might rise the most, along with the reasons behind those expected increases. It’s very high-level. If you want more details on a specific area, please check our real estate pack tailored to the Luxembourg City market.
| Neighborhood | Level of Increase | Why |
|---|---|---|
| Grund | High | Recent development of luxury housing projects and its increasing appeal to international buyers as travel normalizes post-pandemic, driving demand. |
| Kirchberg | High | Expected rise due to limited housing stock, upcoming renovations to modern buildings, and growing demand for prime properties in central Luxembourg City. |
| Gare | Medium-High | Ongoing gentrification and new transport links, along with several planned redevelopment projects in the area, are likely to push prices higher. |
| Cloche d'Or | Medium | The shift towards hybrid workspaces is driving demand for residential properties near business districts, combined with new mixed-use developments. |
| Belair | Medium-High | Eco-friendly urban projects and recent construction of new schools and parks are increasing its attractiveness for families, pushing prices upward. |
| Limpertsberg | Medium | Investment in local infrastructure, such as the extension of tram lines and renovation of historic areas, is boosting long-term value. |
| Clausen | High | Upcoming large-scale urban regeneration projects and improved public transport access are expected to make this area more desirable. |
| Cessange | Medium-High | Its proximity to the city center, along with new office and residential developments, makes it increasingly attractive to professionals seeking more space. |
| Hollerich | Medium | Gentrification and cultural regeneration projects are attracting new residents, leading to rising prices as the area becomes more fashionable. |
| Weimershof | High | As new luxury developments are launched, demand for premium housing among wealthy buyers is expected to further increase property values. |
| Ville Haute | High | Upcoming restoration of historic sites and high-profile cultural projects are driving a renewed focus on this central, historic location. |
-The best areas to buy a property in Luxembourg City
If I'm looking to invest in real estate, what types of properties should I focus on for the best value appreciation in Luxembourg City?
In 2025, Luxembourg City real estate trends focus on tech-smart, energy-efficient apartments, larger suburban homes for families, properties with outdoor spaces, and eco-friendly buildings—all driving higher demand and prices. Here is a summary.
- Tech-Equipped and Energy-Efficient Apartments:
Driven by remote work and sustainability trends, these homes offer smart technology features and energy-saving systems. They cater to young professionals and tech workers, making them a hot commodity in 2025.
- Family-Sized Apartments in Suburban Areas:
With a growing demand for larger living spaces, especially among families, suburban areas near Luxembourg City are seeing increased interest. Proximity to green spaces and schools is a major factor driving value.
- Properties with Outdoor Spaces:
Post-pandemic, outdoor spaces like terraces, balconies, or gardens have become highly desirable. In dense cities like Luxembourg City, these features offer a much-needed escape and are likely to drive up property values.
- Eco-Friendly Buildings with Low Carbon Footprints:
Luxembourg City's commitment to sustainability is boosting demand for eco-certified buildings. Buyers are increasingly valuing properties that align with the city’s green goals, leading to price appreciation in this category.
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