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
Why is Luxembourg emerging as a prime destination for property investment in 2025? Is it the robust economic stability, the strategic location in Europe, or the attractive tax incentives? What are the key advantages for investors?
We get asked these questions all the time because we’re on the ground, working closely with developers, real estate agents, and investors like you. With so much interest in this market, we’ve decided to turn our individual answers into a comprehensive article for everyone to benefit from.
Our goal is to provide a clear case for investing in Luxembourg's real estate market, backed by our firsthand experience and market knowledge.
If you think we missed an important point in our content or want to know more, don’t hesitate to reach out (we answer super fast). Your feedback makes our content even stronger.
Finally, please note that this is not financial or investment advice. Investing in real estate carries inherent risks, and market conditions can change unexpectedly. We strongly encourage you to conduct thorough research and consult with a qualified financial advisor before making any investment decisions.
1) There is a lot of temporary workers, which makes it easier for you to find renters
Luxembourg's rental market is thriving, largely due to its high number of temporary workers.
As of early 2023, Luxembourg had a foreign population of 313,400 people, with many hailing from Portugal, France, Italy, Belgium, and Germany. This diverse mix of nationalities fuels the demand for rental properties, as these individuals often prefer renting over buying.
The job scene in Luxembourg is another big factor. By late 2022, there were 227,799 cross-border workers in the private sector. These workers typically have short-term contracts, making renting a more sensible choice than purchasing a home.
Luxembourg is part of the Greater Region Saar-Lor-Lux, which benefits from the freedom of movement within the Schengen area. This setup leads to a high commuter rate, with many people living in one country and working in another, further boosting the rental market.
For those considering property investment, it's worth noting that Luxembourg's rental market is bolstered by its strategic location and economic stability. The country attracts a steady stream of professionals and temporary workers, ensuring a consistent demand for rental properties.
Our team found this video "Finding Accommodation in Luxembourg | Tips & Hacks" which confirms the robust rental market, particularly driven by the high number of international workers. The competitive nature of the rental market is evidenced by the requirement for guarantors and substantial security deposits.
2) In this country, a strong tradition of homeownership helps property values grow
In Luxembourg, 67.60% of people own their homes, which is quite high for Europe.
This preference for owning homes rather than renting keeps the property market buzzing. Luxembourg's property values have generally gone up over time, even with some ups and downs. For instance, in March 2021, the house price index hit a peak of 17.2%. Although there was a dip to -14.5% in December 2023, the overall trend shows a market that bounces back and keeps investors interested.
Luxembourg is tiny, and land is scarce, which naturally pushes property prices up. This limited space means that existing properties hold their value well. Plus, Luxembourg's reputation as a financial center draws in expatriates who are keen to buy property, adding to the competitive market.
For those considering buying property here, it's worth noting that the demand is consistently high due to these factors. The cultural inclination towards homeownership plays a big role in this, as does the country's economic stability.
Investors find Luxembourg appealing because of its resilient property market. Even when prices dip, the market tends to recover, making it a reliable place to invest in real estate.
So, if you're thinking about buying property in Luxembourg, know that the market is competitive but stable, with a strong tradition of homeownership that supports property value growth.
Sources: Luxembourg Home Ownership Rate, Luxembourg Nominal Residential Property Price Index Growth, Luxembourg Housing Market
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.
3) In this country, your investment is secure thanks to strong property rights
In Luxembourg, property rights are exceptionally well-protected, making it a safe bet for property buyers.
Thanks to its robust legal framework, Luxembourg consistently ranks high in international property rights indices. In 2023, it was ranked 1st in the "Registering Property" category of the World Bank's "Ease of Doing Business" report. This top spot highlights how efficient and streamlined the property registration process is, making it a breeze for new property owners.
Luxembourg isn't resting on its laurels; it's actively enhancing its legal system to protect property owners even more. Recent reforms to the civil code have been implemented to strengthen protection against disputes and ensure that title deeds are crystal clear. This means you can feel confident about your ownership rights without worrying about unexpected legal hiccups.
One of the standout features of Luxembourg's property market is the low incidence of property disputes in its courts. Compared to other countries, there are fewer cases involving property conflicts, which speaks volumes about the effectiveness of its legal framework in preventing such issues.
For anyone considering buying property in Luxembourg, this strong legal foundation offers peace of mind. The country's proactive approach to legal reforms and its efficient property registration process make it an attractive option for investors looking for security and stability.
Sources: World Bank, Government of Luxembourg, Luxembourg Courts
4) Luxembourg’s luxury property market is expanding, giving you high-end investment options
Luxembourg's luxury real estate market is on the rise, offering enticing opportunities for high-end investments.
Picture this: property prices are set to climb by 3% to 7% in 2025, thanks to a perfect storm of high demand and limited housing supply. International buyers are flocking to Luxembourg, drawn by its reputation as a financial powerhouse and its appealing tax benefits. This influx is particularly noticeable among expatriates and international professionals, especially those in the financial sector, who are snapping up luxury homes in prime locations.
Luxembourg's economy is a rock-solid foundation for this growth. With low unemployment rates and a high GDP per capita, the country boosts both purchasing power and consumer confidence. This economic stability makes it an attractive destination for property investment.
Another factor making Luxembourg's real estate market appealing is the favorable mortgage conditions. Low interest rates are making it easier for investors to finance their property purchases, adding to the allure of the market.
For those considering a move or investment, Luxembourg offers a unique blend of financial security and lifestyle appeal. The country's strong economy and strategic location in Europe make it a magnet for international buyers looking for luxury properties.
Whether you're an investor or a potential homeowner, Luxembourg's luxury real estate market is a promising landscape. With its growing demand and limited supply, it's a market that offers both stability and potential for growth.
Sources: Statista, Luxembourg for Finance, Tax Foundation
5) In Luxembourg, limited land means property values keep rising
Luxembourg's small size and limited land availability make property scarce and drive up prices.
With just 2,574 square kilometers, Luxembourg is one of Europe's smallest countries, leading to a high population density. This means there's not much room to build new homes or expand existing ones, especially in popular areas like Luxembourg City.
Luxembourg's population has been growing steadily, mainly due to immigration, and this growth is focused in urban areas. As more people move in, the demand for housing keeps rising, but the limited land means supply can't keep up.
Government policies also play a role. They aim to preserve green spaces, which is great for the environment but restricts land development. This adds to the scarcity of land for new housing projects, pushing property prices even higher.
Since 2010, property prices in Luxembourg have increased by 50% across all housing types. Although there was a slight dip in 2023, the trend is still upward, and experts predict prices will continue to rise in 2025 due to ongoing high demand and limited supply.
Real estate agencies are optimistic about the future, expecting the market to remain strong. The combination of high demand and limited supply makes Luxembourg's real estate market unique and competitive.
Sources: Trading Economics, Nextimmo, Economy Finance, XLNC
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6) In this country, people have strong purchasing power due to a high GDP per capita
Luxembourg boasts a remarkably high GDP per capita, reflecting its economic prowess.
In 2023, the GDP per capita was 105,996.66 USD, a figure that stands at an impressive 839% above the global average. This highlights the country's robust economic health and the strong purchasing power of its residents.
Looking ahead, projections for 2024 suggest a rise to 107,163.00 USD, with expectations of continued growth in the years to follow. This upward trend is a testament to Luxembourg's thriving economy.
When considering purchasing power parity (PPP), the GDP per capita was even higher at 132,414.22 USD in 2023. This measure accounts for cost of living and inflation, offering a clearer picture of the high standard of living enjoyed by Luxembourg's residents.
Luxembourg's economic stability is significantly bolstered by its strong banking and financial services sector. This sector not only attracts substantial foreign investment but also plays a crucial role in maintaining the country's high GDP per capita.
For those considering property investment, Luxembourg's economic indicators suggest a promising environment with strong purchasing power among its residents.
Sources: Trading Economics, Investopedia
7) A lot of people want homes in Luxembourg because it’s a key business location
Luxembourg's central location in Europe makes it a magnet for international business, driving up housing demand.
With its strategic position, Luxembourg has become a key logistics and distribution hub, offering easy access to major European cities. This convenience attracts businesses and professionals, making it a sought-after place to live and work.
The presence of numerous EU institutions and international companies has cemented Luxembourg's reputation as a financial powerhouse. This not only boosts the economy but also draws in professionals and expatriates, increasing the need for housing.
Luxembourg's financial sector is a major player, contributing significantly to the country's GDP and employment. This economic strength further fuels the demand for both residential and commercial properties.
Modern infrastructure developments, like the tram system and new airport connections, have enhanced Luxembourg's connectivity within Europe. This makes relocation easier for businesses and professionals, adding to the housing demand.
The country's multilingual environment and high quality of life attract international talent, expanding the expatriate community and increasing the need for housing.
Sources: Economy Finance, Trading Economics, KPMG
We believe this video "Luxembourg: Europe's Financial Fortress for Offshore Endeavors" emphasizes how Luxembourg's central European location makes it a strategic hub for international business, naturally increasing housing demand from international professionals and companies.
8) With a high standard of living, the country attracts expats who need homes
Luxembourg's high standard of living is a magnet for expatriates seeking housing.
With a GDP per capita expected to hit $110,056 in 2025, Luxembourg stands out economically, far surpassing the Euro Area average. This economic strength is a key reason why many choose to live here. The country’s wealth is not just on paper; it translates into real benefits for its residents.
Luxembourg's residents enjoy average household net-adjusted disposable incomes of USD 44,773, which is significantly above the OECD average. This means more money in your pocket for leisure, savings, or investments, contributing to a comfortable lifestyle. The financial perks are a big draw for those considering a move.
Public services and infrastructure in Luxembourg are top-notch, making life easier for everyone. The country excels in well-being dimensions like income, health, and safety, ensuring a high quality of life. These factors make it a desirable place to settle down, especially for families and professionals.
Luxembourg is also a bustling business hub, thanks to the presence of major EU institutions and multinational companies. This not only boosts the economy but also increases housing demand among expatriates who come for work opportunities. The vibrant job market is a significant pull factor.
Sources: Trading Economics, OECD Better Life Index, Focus Economics
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.
9) Luxembourg is a great choice for commuters because it’s close to major European cities
Luxembourg is a prime spot for commuters thanks to its closeness to major European cities.
With 128,000 people commuting daily to Luxembourg City, it's clear that many find the journey worthwhile. Most of these commuters come from France, Germany, and Belgium, enjoying the short travel distances and efficient transport links.
Luxembourg's location is a big draw for multinational companies and international professionals. Its central position in Europe, bordering France, Germany, and Belgium, makes it an ideal hub for business and contributes to the city's economic vibrancy.
High-speed train connections are a game-changer, making travel to and from neighboring countries quick and efficient. In 2023, record numbers of travelers used high-speed rail services in France and Europe, underscoring the ease of commuting to Luxembourg.
For those working in Luxembourg but living elsewhere, the excellent transport links mean they can enjoy the best of both worlds. The city's strategic location and transport infrastructure make it a top choice for cross-border workers.
Sources: VDL Mobility Plan, Public Now, Transport Strategy
10) With a multilingual population, Luxembourg attracts international buyers and renters
Luxembourg's multilingual population is a major draw for international buyers and renters.
In 2023 and 2024, nearly half of Luxembourg’s population was of foreign origin, highlighting its vibrant expatriate community. This diverse mix creates a welcoming atmosphere for newcomers from all over the globe. With three official languages—Luxembourgish, French, and German—Luxembourg makes it easy for international residents to adapt and feel at home.
Luxembourg's linguistic diversity is a big plus for those moving here. The country ranks 11th in the EF English Proficiency Index among non-native English-speaking countries, which helps international residents communicate and integrate smoothly. This is especially beneficial for those who might not speak the local languages fluently.
The presence of multinational corporations in Luxembourg attracts global talent, adding to the country's multilingual vibe. This influx of international professionals not only enriches the cultural scene but also boosts demand in the real estate market. Reports show a growing need for housing and rental properties, driven by these global professionals.
Luxembourg's appeal is further enhanced by its strategic location in Europe, making it a hub for business and travel. The country's efficient public transport and connectivity to major European cities make it an attractive place for international buyers and renters looking for convenience and accessibility.
For those considering a move, Luxembourg offers a unique blend of cultural richness and modern amenities. Its multilingual environment, combined with a strong economy and high quality of life, makes it a top choice for international residents seeking a new home.
Sources: Statistiques Public, Statista, Logistics Public, Economy Finance
11) Luxembourg’s cultural diversity attracts a broad range of tenants
Luxembourg's cultural diversity is a big attraction for potential tenants, offering a unique mix of languages and communities.
With nearly half of its population being foreign residents, Luxembourg is the EU Member State with the highest share of non-national citizens. This creates a lively and inclusive environment that draws people from all over the world. Imagine living in a place where you can experience a global community right at your doorstep.
The multilingual nature of Luxembourg is another appealing feature. Almost 50% of the population speaks three or more languages, which has significantly increased over the past decade. This multilingualism not only makes communication easier but also enriches the cultural scene, making it a great place for those who love linguistic and cultural exchange.
Luxembourg's commitment to multiculturalism is clear in its international schools and cultural institutions. These places promote intercultural dialogue and understanding, making it easier for newcomers to feel at home. Events like the Festival des migrations, des cultures et de la citoyenneté highlight the country's dedication to celebrating its diverse cultural heritage.
Such events provide a welcoming atmosphere for both expatriates and locals, offering a chance to engage with different cultures. This makes Luxembourg not just a place to live, but a place to experience the world. The country's dedication to multiculturalism is evident in its vibrant cultural scene.
For anyone considering a move, Luxembourg offers a unique blend of cultural richness and community spirit. Its diverse demographic and multilingual environment make it an attractive option for those seeking a dynamic and inclusive place to call home.
Sources: Cultural Policies, RTL Today, Research Luxembourg
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12) High-income professionals are drawn to the country’s strong financial sector, boosting demand for quality housing
Luxembourg's financial sector is a magnet for high-income professionals seeking quality housing.
With one of the highest GDP per capita figures globally, Luxembourg showcases its economic strength and prosperity. The financial sector's liabilities were a staggering 14,685.40% of GDP in December 2023, highlighting its crucial role in the economy. This robust financial environment attracts professionals who are drawn to the stability and opportunities it offers.
Almost a third of Luxembourg's workforce is in the financial sector, with 135,519 finance-related jobs making up 29.5% of national employment in 2023. These jobs span banking, funds, insurance, and consulting, offering lucrative career paths for those in the industry. This concentration of finance jobs makes Luxembourg a hub for high-income professionals.
The booming financial sector has led to a surge in demand for luxury and high-quality housing. Property prices in Luxembourg City and nearby areas are rising as these professionals seek homes that match their lifestyle and financial means. The demand for quality living spaces is a direct result of the financial sector's growth.
Luxembourg's low unemployment rates create a stable and attractive environment for professionals. The tight labor market, coupled with generous fiscal support, has boosted real income and savings. This economic stability further fuels the demand for quality housing, as professionals are more willing to invest in their living spaces.
Sources: Trading Economics, Delano, IMF eLibrary
The video "Finance Jobs in Luxembourg | Visa Sponsorship | Salaries | Tips" demonstrates how Luxembourg's robust financial sector attracts high-income professionals. The country serves as a hub for finance and investment in Europe, with many global financial institutions maintaining a presence there, creating sustained demand for quality housing.
13) With excellent digital connectivity, the country attracts tech-savvy residents
Luxembourg is a hotspot for tech enthusiasts, thanks to its stellar digital connectivity.
In 2023 and 2024, nearly everyone in Luxembourg had internet access, with an impressive 99.0% internet penetration rate. This means whether you're in the city or the countryside, you're likely to be connected. The internet speeds are nothing to scoff at either, with mobile connections averaging 90.85 Mbps and fixed connections at 121.78 Mbps. This makes streaming, gaming, or working from home a breeze.
The government has been a key player in this digital boom. Through initiatives like the digital governance strategy, they've laid down a solid digital infrastructure. The Ministry for Digitalisation has been pivotal, not just in enhancing public services but also in nurturing a fertile ground for tech startups and innovation hubs.
Luxembourg's tech scene is buzzing with activity. With 521 tech startups, places like the House of Startups are buzzing with innovation. Events like Luxembourg Venture Days are a big draw for tech lovers, showcasing the country's vibrant tech culture. This thriving ecosystem is a magnet for tech professionals worldwide, creating a growing demand for tech-related jobs.
For anyone considering a move, Luxembourg offers a unique blend of high-speed connectivity and a supportive environment for tech innovation. It's not just about the numbers; it's about being part of a community that's shaping the future of technology.
Sources: DataReportal, Nucamp, OECD, Ministry for Digitalisation
14) Luxembourg’s focus on sustainability makes its properties more appealing
Luxembourg's environmental policies are making properties here more appealing.
In recent years, Luxembourg has embraced the European Green Deal, setting ambitious goals to cut greenhouse gas emissions by 55% by 2030 and aiming for climate neutrality by 2050. This commitment is paving the way for sustainable growth, making the country a hotspot for eco-conscious buyers. In 2023, Luxembourg took a bold step by enforcing strict energy efficiency standards for new buildings, mandating the use of heat pumps for heating. This shift towards fossil-free heating is making new constructions more environmentally friendly and attractive to potential homeowners.
The government sweetened the deal with the Klimabonus aid, offering financial incentives for green building certifications. This encourages the use of renewable energy sources like solar panels, making properties not just eco-friendly but also cost-effective in the long run. By 2030, Luxembourg expects renewable energies to make up 37% of its final energy consumption, which is a significant boost for property values.
There's a noticeable trend among buyers leaning towards sustainable homes, reflecting a broader shift towards energy-efficient living. Luxembourg's push for sustainable urban planning and public transportation is also a game-changer. These efforts have cut down air and noise pollution, enhancing the quality of life and making properties more desirable. The government's collaboration with the private sector to promote green technology in real estate is further enhancing the appeal of sustainable properties.
Luxembourg's commitment to sustainability is not just about policies; it's about creating a lifestyle that resonates with modern buyers. The focus on eco-friendly developments and renewable energy is transforming the real estate market, making it a prime destination for those seeking a greener lifestyle. With these initiatives, Luxembourg is setting a benchmark in sustainable living, attracting buyers who value both environmental responsibility and quality of life.
Sources: Gouvernement.lu, CA-EED, Guichet Public, PwC Luxembourg, Baker McKenzie Resource Hub
We created this infographic to give you a simple idea of how much it costs to buy property in different parts of Luxembourg. As you can see, it breaks down price ranges and property types for popular cities in the country. We hope this makes it easier to explore your options and understand the market.
15) With strong infrastructure, property values in the country are boosted
Luxembourg's infrastructure is a major boost to property values in the country.
With its top-notch road and public transport systems, getting around Luxembourg is a breeze. The government is extending the tramway to link key districts and the airport by 2025, making daily commutes smoother for everyone. This ease of movement is a big draw for both locals and businesses, enhancing the appeal of properties.
Luxembourg is also a leader in digital infrastructure, offering high-speed internet access across the country. This connectivity supports the growth of digital businesses, which in turn boosts property values. For tech-savvy investors and companies, Luxembourg is a modern, connected haven.
The development of business hubs like La Cloche d'Or and Kirchberg is another factor driving property demand. These areas are bustling with office spaces, homes, and leisure spots, making them prime locations for living and working. The limited space available in these districts only adds to the property value surge.
Luxembourg's strategic investments in infrastructure, both physical and digital, create a robust environment for property growth. The country's commitment to enhancing its infrastructure is evident in its ongoing projects and developments.
Sources: CBRE Luxembourg, XLNC, European Commission, Statista
16) Luxembourg’s top-notch education system draws families looking for homes
Luxembourg's education system is highly regarded, making it a magnet for families seeking top-notch schooling for their kids.
One standout feature is the University of Luxembourg, which has consistently ranked among the top 250 global institutions in the Times Higher Education rankings. This is impressive, especially as some other European universities have seen their rankings slip. The university's strong performance is a testament to the quality of education available in Luxembourg.
International schools in Luxembourg, like the International School of Luxembourg (ISL), are also thriving. With a student body of over 1300 students from 57 different nationalities, ISL showcases the global appeal of Luxembourg's education system. This diversity is a big draw for families from around the world.
Luxembourg's commitment to education is evident in its investment in specialized services and programs, particularly for students from various linguistic backgrounds. The University of Luxembourg is known as one of Europe's "most international" institutions, offering programs in French, German, and English. This multilingual approach is a unique advantage, attracting international students and families alike.
The growing expatriate population in Luxembourg highlights the country's allure, including its education system. This influx is likely to boost demand for housing near schools, as families prioritize education when relocating. Real estate market reports show a high demand for family-sized housing near schools, indicating that families are willing to move to Luxembourg for its excellent education system.
Sources: RTL Today, International School of Luxembourg, European Commission, Shiksha, CEIC Data
While this article provides thoughtful analysis and insights based on credible and carefully selected sources, it is not, and should never be considered, financial advice. We put significant effort into researching, aggregating, and analyzing data to present you with an informed perspective. However, every analysis reflects subjective choices, such as the selection of sources and methodologies, and no single piece can encompass the full complexity of the market. Always conduct your own research, seek professional advice, and make decisions based on your own judgment. Any financial risks or losses remain your responsibility. Finally, please note that we are not affiliated to any of the sources provided. Our analysis remains then 100% impartial.