Authored by the expert who managed and guided the team behind the Luxembourg Property Pack
Everything you need to know before buying real estate is included in our Luxembourg Property Pack
This article breaks down the current state of property prices in Luxembourg, what has changed over the past year, and where prices are likely headed in 2026 and beyond.
We update this blog post regularly to reflect the latest official data and market shifts, so you always have access to fresh information.
Whether you are buying your first home or considering an investment property, you will find concrete numbers and clear explanations below.
And if you're planning to buy a property in this place, you may want to download our pack covering the real estate market in Luxembourg.
Insights
- The average house price in Luxembourg sits around €960,000 as of the first half of 2026, but properties in Luxembourg City can easily exceed €1.3 million due to the capital premium effect.
- New-build apartments in Luxembourg are rising faster than existing homes, with VEFA properties gaining about 2.8% over the past 12 months compared to just 0.7% for existing apartments.
- Property prices in Luxembourg dropped significantly between 2022 and 2024, but the correction phase appears to be over and the market is now stabilizing with modest gains.
- The price per square meter in Luxembourg varies dramatically by distance to the capital, with close-in communes like Strassen and Bertrange commanding premiums of 30% or more over outer areas.
- Interest rate movements remain the single biggest factor affecting Luxembourg property prices, as the 2022 to 2024 correction was directly triggered by rising borrowing costs.
- Luxembourg's property market saw unusual volatility in 2025 due to temporary tax measures that pulled transactions forward, creating a "rush then cool" pattern in sales activity.
- Over the next five years, Luxembourg property prices are forecast to rise roughly 18% in total, which translates to about 3.3% annual growth on average.
- Small apartments under 70 square meters in prime Luxembourg locations often feel overpriced because the price per square meter is structurally highest for compact units.
- Cross-border workers represent a persistent source of housing demand in Luxembourg, with the country's labor market pulling in commuters from France, Belgium, and Germany.
- Kirchberg, Gasperich, and Limpertsberg consistently rank among the Luxembourg neighborhoods with the strongest price resilience and fastest recovery after market corrections.
What are the current property price trends in Luxembourg as of 2026?
What is the average house price in Luxembourg as of 2026?
As of early 2026, the average house price in Luxembourg is approximately €960,000 (around $1,010,000 USD), though the median sits closer to €890,000 because a smaller number of high-value transactions in the capital pull the mean upward.
When it comes to price per square meter, houses in Luxembourg typically trade at about €5,900 per square meter ($6,200 USD or roughly €5,900 EUR), although this figure varies significantly depending on how close you are to Luxembourg City.
If you are looking at the realistic range that covers roughly 80% of house purchases in Luxembourg, you can expect prices between €650,000 and €1,400,000, with Luxembourg canton transactions clustering at the higher end and properties in northern or eastern regions falling toward the lower end.
How much have property prices increased in Luxembourg over the past 12 months?
Property prices in Luxembourg have increased by roughly 1% to 2% overall during the past 12 months, marking a shift from the declines seen during the 2022 to 2024 correction period.
The range of price changes varies by property type, with existing apartments up about 0.7%, existing houses gaining around 1.1%, and new-build VEFA apartments showing the strongest growth at approximately 2.8% over the same period.
The most significant factor behind this stabilization is the leveling off of interest rates, which stopped the affordability squeeze that had been pushing prices down since 2022.
Which neighborhoods have the fastest rising property prices in Luxembourg as of 2026?
As of early 2026, the neighborhoods with the fastest rising property prices in Luxembourg are Kirchberg, Gasperich (including Cloche d'Or), and Limpertsberg, all located within or adjacent to Luxembourg City.
These three neighborhoods are seeing estimated annual price growth of 3% to 5%, outpacing the national average by a significant margin due to their combination of job proximity, transport links, and limited available stock.
The main demand driver is straightforward: these areas sit at the heart of Luxembourg's employment base, with Kirchberg hosting EU institutions and major banks, Gasperich anchoring a modern business district, and Limpertsberg offering established residential appeal near the city center.
By the way, you will find much more detailed price ranges across neighborhoods in our property pack covering the real estate market in Luxembourg.
We have made this infographic to give you a quick and clear snapshot of the property market in Luxembourg. It highlights key facts like rental prices, yields, and property costs both in city centers and outside, so you can easily compare opportunities. We’ve done some research and also included useful insights about the country’s economy, like GDP, population, and interest rates, to help you understand the bigger picture.
Which property types are increasing faster in value in Luxembourg as of 2026?
As of early 2026, the ranking of property types by value appreciation in Luxembourg places new-build VEFA apartments at the top (about 2.8% annually), followed by existing houses (around 1.1%), and then existing apartments (approximately 0.7%).
The top-performing category, new-build apartments sold off-plan, has appreciated roughly 3% over the past year, though this figure can fluctuate more than other segments because transaction volumes are smaller.
The main reason new-build properties are outperforming is supply scarcity: Luxembourg has limited land and a slow permitting process, so energy-efficient new apartments in good locations attract buyers willing to pay a premium for modern specifications and lower running costs.
Finally, if you're interested in a specific property type, you will find our latest analyses here:
What is driving property prices up or down in Luxembourg as of 2026?
As of early 2026, the top three factors driving property prices in Luxembourg are interest rate conditions, tax policy timing effects from 2025, and the persistent premium attached to properties close to Luxembourg City.
The single factor with the strongest upward pressure is the stabilization of ECB interest rates, which has stopped affordability from deteriorating further and allowed buyer confidence to return after two years of correction.
If you want to understand these factors at a deeper level, you can read our latest property market analysis about Luxembourg here.
Get fresh and reliable information about the market in Luxembourg
Don't base significant investment decisions on outdated data. Get updated and accurate information with our guide.
What is the property price forecast for Luxembourg in 2026?
How much are property prices expected to increase in Luxembourg in 2026?
As of early 2026, property prices in Luxembourg are expected to increase by approximately 2.5% over the course of the year, reflecting a modest recovery rather than a return to boom conditions.
The realistic range of forecasts from different analysts sits between 1% and 4%, with more optimistic views assuming continued rate stability and stronger economic growth, while conservative estimates account for potential external shocks.
The main assumption underlying most forecasts is that ECB policy rates will remain broadly stable through 2026, preventing any renewed squeeze on household borrowing capacity.
We go deeper and try to understand how solid are these forecasts in our pack covering the property market in Luxembourg.
Which neighborhoods will see the highest price growth in Luxembourg in 2026?
As of early 2026, the neighborhoods expected to see the highest price growth in Luxembourg are Kirchberg, Gasperich (Cloche d'Or), Limpertsberg, Belair, and the close-in communes of Strassen, Bertrange, and Hesperange.
Projected price growth for these top neighborhoods ranges from 3% to 5% during 2026, roughly double the national average, because they sit on the strongest part of Luxembourg's capital proximity premium curve.
The primary catalyst is job concentration: when financing conditions stabilize, demand rebounds fastest in areas with the shortest commutes to major employers, and Luxembourg City's financial district and EU institutions anchor that demand.
One emerging neighborhood that could surprise with higher-than-expected growth is Bonnevoie, where ongoing renovations and improved connectivity are attracting younger buyers priced out of more established central areas.
By the way, we've written a blog article detailing what are the current best areas to invest in property in Luxembourg.
What property types will appreciate the most in Luxembourg in 2026?
As of early 2026, new-build VEFA apartments are expected to appreciate the most in Luxembourg, followed by well-located existing houses and townhouses with good energy ratings.
Projected appreciation for top-performing new-build apartments sits at roughly 3% to 4% for the year, benefiting from continued scarcity in the development pipeline and buyer preference for energy-efficient homes.
The main demand trend driving this appreciation is the combination of tightening energy standards and buyer willingness to pay more upfront for lower utility costs, which makes new-build stock particularly attractive in a high-cost market like Luxembourg.
The property type expected to underperform is older apartments with poor energy ratings, as renovation costs and stricter regulations make them less appealing to both owner-occupiers and investors.
We did some research and made this infographic to help you quickly compare rental yields of the major cities in Luxembourg versus those in neighboring countries. It provides a clear view of how this country positions itself as a real estate investment destination, which might interest you if you’re planning to invest there.
How will interest rates affect property prices in Luxembourg in 2026?
As of early 2026, the expected stability of ECB interest rates through the year should support a gradual recovery in Luxembourg property prices by preventing further erosion of household borrowing capacity.
The current ECB deposit facility rate sits at around 3%, and mortgage rates in Luxembourg typically follow with a small lag, meaning most forecasters expect household borrowing costs to remain steady rather than rising or falling sharply.
As a general rule in Luxembourg, a 1% increase in mortgage rates reduces borrowing capacity by roughly 10%, which translates to downward pressure on transaction volumes first and prices second, so rate stability is good news for sellers and buyers alike.
You can also read our latest update about mortgage and interest rates in Luxembourg.
What are the biggest risks for property prices in Luxembourg in 2026?
As of early 2026, the three biggest risks for property prices in Luxembourg are a renewed tightening of interest rates or bank lending standards, a broader economic slowdown affecting Luxembourg's financial sector, and the potential for policy changes that distort transaction timing.
The single risk with the highest probability of materializing is a macro confidence shock, because Luxembourg's economy is heavily exposed to international financial services and any significant downturn in that sector would quickly affect household incomes and buyer sentiment.
We actually cover all these risks and their likelihoods in our pack about the real estate market in Luxembourg.
Is it a good time to buy a rental property in Luxembourg in 2026?
As of early 2026, buying a rental property in Luxembourg can be a reasonable decision for investors with a long-term horizon and access to financing at current rates, but it is not the right moment for those seeking quick returns or relying on aggressive leverage.
The strongest argument in favor of buying now is that prices have stabilized after a two-year correction, meaning you are no longer buying at a peak, and Luxembourg's structural demand from cross-border workers and migration should support rental income over time.
The strongest argument for waiting is that rental yields in prime Luxembourg locations remain compressed relative to borrowing costs, so your cash-on-cash return in the early years may be slim unless you can secure favorable financing or find an undervalued property.
If you want to know our latest analysis (results may differ from what you just read), you can read our assessment on whether now is a good time to buy a property in Luxembourg.
You'll also find a dedicated document about this specific question in our pack about real estate in Luxembourg.
Buying real estate in Luxembourg can be risky
An increasing number of foreign investors are showing interest. However, 90% of them will make mistakes. Avoid the pitfalls with our comprehensive guide.
Where will property prices be in 5 years in Luxembourg?
What is the 5-year property price forecast for Luxembourg as of 2026?
As of early 2026, cumulative property price growth in Luxembourg over the next five years is expected to reach approximately 18%, bringing prices to levels meaningfully above current values by 2030 or early 2031.
The range of five-year forecasts spans from about 10% in a conservative scenario (slower growth, possible rate increases) to roughly 25% in an optimistic scenario (strong economic performance, rate cuts, and continued supply constraints).
This translates to a projected average annual appreciation rate of about 3.3% per year over the next five years in Luxembourg, which is healthy but not speculative.
The key assumption most forecasters rely on is that Luxembourg's structural demand-supply imbalance will persist, with population growth and cross-border labor demand continuing to outpace new housing construction.
Which areas in Luxembourg will have the best price growth over the next 5 years?
The top three areas in Luxembourg expected to have the best price growth over the next five years are Luxembourg City (especially Kirchberg, Gasperich, and Limpertsberg), the inner belt communes (Strassen, Bertrange, Hesperange, Walferdange), and the Esch-sur-Alzette and Belval corridor.
Projected five-year cumulative price growth for these top-performing areas ranges from 20% to 30%, outpacing the national average because they combine job access, transport links, and limited room for new supply.
This five-year outlook is similar to our shorter forecast in terms of which areas lead, but the magnitude of outperformance compounds over time, meaning the gap between prime locations and peripheral areas widens as years pass.
One currently undervalued area with strong potential for outperformance over five years is Bonnevoie in Luxembourg City, where regeneration projects and improving amenities could attract buyers priced out of neighboring districts.
What property type will give the best return in Luxembourg over 5 years as of 2026?
As of early 2026, mid-size apartments (one to two bedrooms) in prime or near-prime Luxembourg locations are expected to give the best total return over five years, combining solid appreciation with reliable rental demand.
Projected five-year total return for this property type, including both price appreciation and rental income, could reach 35% to 45%, assuming you buy in the right location and maintain the property well.
The main structural trend favoring well-located apartments is that Luxembourg's growing workforce, including many single professionals and small households, creates steady demand for rental units near employment hubs.
For investors seeking a balance of return and lower risk, existing houses in the close-in commuter belt offer more stability than volatile new-build segments, with appreciation likely tracking the national average while providing larger living spaces that appeal to families.
How will new infrastructure projects affect property prices in Luxembourg over 5 years?
The top three infrastructure developments expected to impact property prices in Luxembourg over the next five years are tram line extensions within Luxembourg City, continued rail improvements connecting the capital to surrounding towns, and the ongoing expansion of mixed-use districts like Cloche d'Or and Belval.
Properties near completed transport infrastructure in Luxembourg typically command a price premium of 5% to 15% compared to similar properties without such access, because commute time to the capital is the dominant factor in Luxembourg's price structure.
The neighborhoods that will benefit most from these developments include Bonnevoie and Gasperich (tram extensions), Bettembourg and Esch-sur-Alzette (rail upgrades), and any commune gaining faster direct access to Kirchberg or the central business district.
How will population growth and other factors impact property values in Luxembourg in 5 years?
Luxembourg's population is projected to grow at roughly 1.5% to 2% per year over the next five years, which should support property values by adding thousands of new households annually to an already undersupplied housing market.
The demographic shift with the strongest influence on property demand in Luxembourg is the continued growth of smaller households, including young professionals and couples without children, which increases demand for compact apartments near urban job centers.
Migration patterns, both from within the EU and internationally, are expected to sustain property demand in Luxembourg because the country's financial sector and EU institutions continue to attract skilled workers who need housing upon arrival.
The property types and areas that will benefit most from these demographic trends are one- and two-bedroom apartments in Luxembourg City and the close-in communes, as well as family houses in the commuter belt for those who eventually settle longer term.
We made this infographic to show you how property prices in Luxembourg compare to other big cities across the region. It breaks down the average price per square meter in city centers, so you can see how cities stack up. It’s an easy way to spot where you might get the best value for your money. We hope you like it.
What is the 10 year property price outlook in Luxembourg?
What is the 10-year property price prediction for Luxembourg as of 2026?
As of early 2026, cumulative property price growth in Luxembourg over the next 10 years is expected to reach approximately 40%, reflecting the country's persistent demand-supply imbalance and high-income economy.
The range of 10-year forecasts spans from about 25% in a conservative scenario (prolonged economic weakness, tighter credit) to roughly 55% in an optimistic scenario (strong growth, favorable rates, continued migration).
This translates to a projected average annual appreciation rate of about 3.4% per year over the next decade in Luxembourg, which is steady growth rather than speculative acceleration.
The biggest uncertainty factor in making 10-year property price predictions for Luxembourg is the future trajectory of interest rates, as even small sustained changes in borrowing costs have large effects on affordability and buyer behavior over a decade.
What long-term economic factors will shape property prices in Luxembourg?
The top three long-term economic factors that will shape property prices in Luxembourg over the next decade are the strength of the financial services sector (Luxembourg's economic engine), population and household growth driven by migration, and the interest rate environment set by the ECB.
The single factor with the most positive impact on property values will likely be continued population growth, because Luxembourg's role as a cross-border employment hub creates persistent demand that outstrips the pace of new housing construction.
The greatest structural risk to property values is a sustained downturn in Luxembourg's financial sector, which would reduce household incomes and slow migration, weakening the demand foundation that supports current prices.
You'll also find a much more detailed analysis in our pack about real estate in Luxembourg.
What sources have we used to write this blog article?
Whether it's in our blog articles or the market analyses included in our property pack about Luxembourg, we always rely on the strongest methodology we can and we don't throw out numbers at random.
We also aim to be fully transparent, so below we've listed the authoritative sources we used, and explained how we used them and the methods behind our estimates.
| Source | Why it's authoritative | How we used it |
|---|---|---|
| Housing Observatory Rapport d'analyse #20 | Official government housing market monitoring built on notarial transaction data. | We used it as the latest transaction-based read of prices heading into 2026. We also used its segment splits to compare price movements by property type. |
| Le Logement en Chiffres #17 | Co-produced by STATEC and the Housing Observatory using notary records. | We used it to anchor typical prices and geographic gradients by canton. We treated it as the level-setting baseline for our estimates. |
| STATEC Inflation Forecast | National statistics office's official inflation projection for Luxembourg. | We used it to translate nominal price forecasts into real outcomes. We also used it to explain what flat prices mean after inflation. |
| European Commission Luxembourg Forecast | EU-level macro forecast with transparent assumptions for all member states. | We used it to frame the 2026 economic backdrop driving housing demand. We cross-checked it against STATEC to avoid single-source reliance. |
| STATEC Conjoncture Flash | Most direct Luxembourg-specific macro update from the national statistics office. | We used it to justify why 2026 demand should be steadier than 2022 to 2024. We also used it in our risk section to highlight potential downsides. |
| ECB Key Interest Rates | Primary source for policy rates that feed into mortgage pricing across the euro area. | We used it to explain the interest rate channel affecting affordability. We paired it with Luxembourg mortgage data for local context. |
| Banque centrale du Luxembourg | Luxembourg's central bank reporting observed household borrowing rates. | We used it as local confirmation of where borrowing costs actually sit. We linked credit conditions to transaction volume changes. |
| IMF Luxembourg Country Page | International institution with standardized surveillance and comparable metrics. | We used it as a third opinion on Luxembourg's growth and inflation context. We relied on it mainly for triangulation purposes. |
| OECD Luxembourg Economic Snapshot | Reputable multilateral source conservative about structural constraints like housing supply. | We used it to reinforce why Luxembourg is unique with its cross-border labor pull. We used it mostly for long-run five to ten year logic. |
| STATEC Population and Employment Portal | National source for demographics and projection methodology. | We used it to justify sustained housing demand pressure over five to ten years. We translated demographics into where demand shows up first. |
| Reuters ECB Rate Survey | Major wire service summarizing a broad survey of professional forecasters. | We used it to build a plausible rate path assumption for 2026. We treated it as sentiment context and anchored actual rates via ECB data. |
| Housing Observatory Publication Page | Official catalog entry confirming document scope, date, and provenance. | We used it to verify we were citing the correct official publication. We also used it as a stable reference link for readers. |
| EY Luxembourg Real Estate Outlook | Large consultancy using official datasets alongside market evidence. | We used it to add color on supply constraints and new-build dynamics. We did not use it as the primary source for price levels. |
| FRED ECB Deposit Rate Series | Well-maintained public data portal republishing ECB series with timestamps. | We used it only as a sanity check that the ECB rate timeline matches official data. We did not treat it as the primary authority. |
Get the full checklist for your due diligence in Luxembourg
Don't repeat the same mistakes others have made before you. Make sure everything is in order before signing your sales contract.
If you want to go deeper, you can read the following: