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Luxembourg's property market is recovering in 2025 after a brief downturn.
As we reach mid-2025, residential property prices in Luxembourg are showing signs of stabilization and modest growth, with existing homes leading the recovery at 3.7% year-on-year increases while new apartments remain largely stagnant.
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Luxembourg's residential property market is stabilizing in mid-2025 after experiencing a correction in 2023-2024, with existing homes showing 3.7% year-on-year price growth while new apartments remain largely flat.
The average asking price stands at €8,179 per square meter as of June 2025, making Luxembourg one of Europe's most expensive property markets, with the Centre region commanding premium prices of €10,493/m².
| Indicator | Current Status (June 2025) | Trend |
|---|---|---|
| Average price (all residential) | €8,179/m² | Recovering after 2024 decline |
| Centre/Luxembourg City | €10,493/m² | Stable, high demand |
| Existing home prices (YoY) | +3.7% | Positive growth returning |
| New apartment prices | Stagnant | Minimal movement |
| Transaction volumes | Rising | Recovery from 2023-24 slump |
| Government support | Strong | Tax credits extended to June 2025 |
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.
What are the current average property prices per square meter in Luxembourg as of June 2025?
Property prices in Luxembourg currently average €8,179 per square meter for all residential properties as we reach mid-2025.
The Centre region, which includes Luxembourg City, commands the highest prices at €10,493/m², reflecting its status as the country's economic and administrative hub. In contrast, the North region offers the most affordable options at €5,814/m², while the South and East regions fall in the middle range at €6,849/m² and €6,947/m² respectively.
These price levels position Luxembourg among Europe's most expensive property markets, significantly higher than neighboring countries. For perspective, Germany's average condominium price of €3,423/m² is less than half of Luxembourg's average, while Belgium's median apartment prices range from €250,000 to €267,000 total, translating to much lower per-square-meter costs.
The substantial regional price variations within Luxembourg reflect differences in economic activity, employment opportunities, and proximity to the capital. Border regions near Belgium, France, and Germany are becoming increasingly attractive due to their relative affordability and improved transport connections.
It's something we develop in our Luxembourg property pack.
How much have property prices increased in Luxembourg over the past year?
Luxembourg's property market shows a mixed picture as of June 2025, with existing homes leading the recovery while new apartments remain stagnant.
Existing homes recorded a 3.7% year-on-year price increase and a 3.5% quarter-on-quarter rise in Q1 2025, marking a clear reversal from the decline experienced in 2023-2024. This recovery in the existing home segment reflects renewed buyer confidence and the impact of government support measures.
However, the overall market remains below its March 2024 peak, with average asking prices down approximately 5% year-on-year. New apartment prices have shown minimal movement, with only slight regional variations observed across different areas of the country.
The divergence between existing and new property segments highlights the selective nature of the current recovery. Buyers are showing preference for established properties with proven value, while new developments face challenges from higher construction costs and tighter financing conditions.
Transaction volumes have risen sharply in late 2024 and early 2025, indicating that despite price uncertainties, market activity is rebounding from the two-year slump.
Which Luxembourg regions experienced the strongest property price growth in 2025?
The Centre region and South region of Luxembourg are experiencing the strongest recovery momentum in property prices as of mid-2025.
| Region | Current Price/m² | Recovery Strength | Key Drivers |
|---|---|---|---|
| Centre (Luxembourg City) | €10,493 | Strong | Financial sector, government jobs, international organizations |
| South | €6,849 | Moderate to Strong | Industrial reconversion, proximity to capital, Belval development |
| East | €6,947 | Moderate | Wine region tourism, German border proximity |
| North | €5,814 | Emerging | Rural charm, remote work trends, affordability |
| Border towns | Varies | Growing interest | Cross-border workers, transport improvements |
Luxembourg City continues to command premium prices due to its concentration of financial institutions, EU institutions, and high-paying jobs. The South region, particularly areas around Esch-sur-Alzette and the Belval development, shows strong growth potential due to ongoing urban regeneration projects.
Border regions are experiencing renewed interest from cross-border workers seeking more affordable options while maintaining reasonable commute times to Luxembourg's economic centers.
What types of properties are seeing the biggest price increases in Luxembourg?
Energy-efficient properties and existing family homes are experiencing the strongest price appreciation in Luxembourg's current market.
Properties with A or B energy ratings command significant premiums, driven by both buyer preferences for lower operating costs and government incentives for sustainable housing. Tech-equipped apartments with smart home features and high-performance insulation are particularly sought after in urban centers.
Family-sized suburban homes with 3-4 bedrooms in established neighborhoods near good schools and transport links are seeing robust demand. These properties benefit from the shift in buyer preferences following the pandemic, with more space for remote work becoming a priority.
Compact apartments in Luxembourg City's prime locations maintain strong values due to limited supply and consistent demand from young professionals and international workers. Properties near major employment hubs or with easy access to public transport command premium prices.
Luxury properties in exclusive neighborhoods continue to attract international buyers, though this segment represents a smaller portion of overall market activity.
What are property price forecasts for Luxembourg in 2026 and beyond?
Property prices in Luxembourg are expected to continue rising moderately through 2026, with annual growth projected between 2-4% as the market finds its new equilibrium.
Short-term forecasts for 2026-2027 suggest stabilized growth patterns, supported by government housing initiatives and demographic trends. The pace of increases will likely remain below the double-digit growth rates seen in the pre-2023 period, reflecting a more sustainable market dynamic.
Medium-term projections for 2025-2030 indicate continued upward pressure on prices, driven by persistent supply-demand imbalances. Luxembourg's population is expected to grow by approximately 1.5% annually, maintaining steady housing demand while new construction struggles to keep pace.
Long-term outlooks spanning 10-20 years suggest that Luxembourg will remain one of Europe's most expensive property markets. The country's status as a financial hub, combined with limited land availability and strict planning regulations, creates structural conditions for sustained price appreciation.
It's something we develop in our Luxembourg property pack.
How did the 2024 Eurozone economic slowdown impact Luxembourg property prices?
The 2024 Eurozone economic slowdown triggered a significant correction in Luxembourg's property market, with prices declining and construction activity plummeting.
Higher interest rates and inflation between 2022-2024 dramatically reduced buyer affordability, leading to a sharp drop in demand. Construction sector bankruptcies increased as developers faced rising material costs and reduced sales, creating a challenging environment for new projects.
Transaction volumes fell to multi-year lows during this period, with both buyers and sellers adopting wait-and-see attitudes. The luxury segment proved more resilient, while mid-market properties experienced the most significant price adjustments.
Government interventions in late 2024 and early 2025, including tax breaks and direct purchase programs, helped stabilize the market. These measures, combined with slightly lower interest rates and improved economic sentiment, have supported the gradual recovery observed in mid-2025.
The correction period ultimately created more balanced market conditions, with buyers becoming more selective and negotiating power shifting from sellers.
What is the current mortgage rate situation in Luxembourg as of June 2025?
Mortgage rates in Luxembourg have stabilized in the 3.5-4.5% range as of June 2025, down from peaks above 5% in late 2023.
Banks have tightened lending criteria following the market correction, with most institutions requiring minimum 20% down payments and conducting stricter affordability assessments. First-time buyers face particular challenges accessing credit, despite government support programs.
Variable rate mortgages have regained some popularity as borrowers anticipate potential future rate decreases, though fixed-rate products still dominate the market. The average loan-to-value ratio has decreased to around 75%, reflecting both regulatory requirements and bank risk management.
Cross-border workers face additional complexities, with some Luxembourg banks limiting lending to non-residents or requiring higher deposits. However, specialized cross-border mortgage products remain available through certain institutions.
The government's temporary reduction in registration fees and mortgage tax credits provide some relief, effectively reducing the total cost of property acquisition for eligible buyers.
How does Luxembourg's property market compare to neighboring countries in 2025?
Luxembourg's property prices remain substantially higher than all neighboring countries, creating significant cross-border dynamics in the housing market.
| Country | Average Price/m² | Price Ratio to Luxembourg | Key Differences |
|---|---|---|---|
| Luxembourg | €8,179 | 1.00 | Highest prices, limited supply |
| Germany (border regions) | €3,423 | 0.42 | Less than half Luxembourg prices |
| Belgium (Brussels) | €3,200-3,500 | 0.40 | Significantly more affordable |
| France (Lorraine) | €2,000-2,500 | 0.27 | Most affordable option |
This price differential drives substantial cross-border commuting, with approximately 200,000 workers traveling to Luxembourg daily from neighboring countries. Many choose to live in border towns and accept longer commutes in exchange for significantly lower housing costs.
The trend has intensified infrastructure development in border regions, with improved rail and road connections making cross-border living more feasible. Some Luxembourg employers offer transportation subsidies to attract workers willing to commute.
Despite the price advantages of living abroad, some professionals still choose Luxembourg residency for quality of life factors, including excellent schools, healthcare, and reduced commute stress.
What government policies are currently supporting Luxembourg property prices?
The Luxembourg government has implemented extensive support measures through June 2025 to stabilize and stimulate the property market.
The "Bëllegen Akt" tax credit provides €40,000 for primary residence purchases and €20,000 for rental investments, significantly reducing acquisition costs for eligible buyers. These temporary measures, initially set to expire earlier, have been extended through mid-2025 due to their effectiveness in supporting market recovery.
Capital gains tax reductions and accelerated depreciation allowances for new constructions incentivize both individual buyers and institutional investors. The government has also reformed property transaction taxes to encourage land development and reduce speculative holding.
Direct government intervention includes purchasing new-build units for public housing, providing developers with guaranteed buyers and supporting affordable housing supply. Subsidies for energy-efficient homes align with environmental goals while stimulating demand for modern properties.
Planning reforms aim to accelerate housing development, though results will take time to materialize in increased supply.
Where did property transaction volumes increase the most in early 2025?
Property transaction volumes in Luxembourg City and the southern communes showed the strongest recovery in early 2025, with activity levels approaching pre-correction figures.
Luxembourg City recorded a 25% increase in transaction volumes compared to the same period in 2024, driven by returning investor confidence and the attraction of temporary tax benefits. The existing apartment segment in the capital showed particularly strong activity.
Southern communes including Esch-sur-Alzette, Dudelange, and Differdange experienced 20-30% increases in sales volumes, benefiting from their relative affordability compared to the capital while offering good transport connections.
Border regions also saw increased activity, with properties in communes near Belgium and France attracting cross-border workers seeking to reduce housing costs. Towns with direct train connections to Luxembourg City proved especially popular.
The luxury segment remained relatively quiet, with high-end properties taking longer to sell despite price adjustments.
It's something we develop in our Luxembourg property pack.
What are experts predicting for Luxembourg property prices by 2030?
Real estate analysts project Luxembourg property prices will continue rising at a moderate 3-5% annual rate through 2030, driven by fundamental supply-demand imbalances.
Population growth projections suggest Luxembourg will add approximately 100,000 residents by 2030, maintaining pressure on the housing stock. The financial sector's continued strength and Luxembourg's role as an EU administrative center ensure sustained high-income employment.
Supply constraints remain the primary driver of long-term price appreciation. Limited developable land, strict planning regulations, and infrastructure limitations prevent rapid expansion of housing stock. New construction is projected to meet only 60-70% of demand through 2030.
Sustainability requirements will increasingly influence prices, with energy-efficient properties commanding growing premiums. Properties failing to meet new environmental standards may face relative price depreciation.
Cross-border dynamics will intensify, potentially leading to policy interventions to ensure housing accessibility for Luxembourg residents. However, the fundamental attractiveness of Luxembourg's economic model suggests continued upward price pressure.
Which factors could potentially slow down property price growth in Luxembourg?
Several factors could moderate Luxembourg's property price growth in the coming years, though none appear likely to reverse the upward trend entirely.
Rising interest rates beyond current levels would further impact affordability, potentially reducing buyer demand and slowing price appreciation. A significant economic downturn affecting Luxembourg's financial sector could reduce high-income employment and housing demand.
Increased remote work adoption might reduce demand for Luxembourg residency, as employees could live further away while maintaining employment. This trend particularly affects expensive urban properties traditionally favored by financial sector workers.
Government policy changes, including potential restrictions on foreign property investment or increased property taxes, could dampen demand. However, such measures would need careful calibration to avoid undermining Luxembourg's economic competitiveness.
Accelerated housing construction through planning reforms and public-private partnerships could eventually improve supply-demand balance, though significant impacts would likely take years to materialize given current development timelines.
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.
Yes - Luxembourg property prices are going up as of June 2025, showing clear recovery after the 2023-2024 correction.
While the growth is more moderate than the rapid increases of previous years, existing homes are already posting 3.7% year-on-year gains, and market fundamentals suggest continued appreciation driven by limited supply, strong demand from international workers, and substantial government support measures.
Sources
- Luxembourg Real Estate Trends - LuxToday
- Real Estate 2025 Luxembourg Trends - Chambers Practice Guides
- Evolution of Real Estate Prices in Luxembourg - NextImmo
- Luxembourg Real Estate Market Trends - Just Arrived
- Luxembourg City Price Forecasts - Investropa
- Luxembourg 2025: A New Real Estate Era - NextImmo
- Luxembourg Real Estate Trends - Investropa
- Key Factors to Watch in Real Estate - NextImmo
- Luxembourg Country Report 2025 - European Commission
- Housing Tax Measures June 2025 - Linari Law
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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.