Real estate

RTL Today – Real estate: Prices up despite a general drop in sales

Property prices in Luxembourg continue to rise despite a significant drop in demand.

According to the latest statistics published by the Housing Observatory, the average price per square meter of new real estate has increased by 8.2% in one year. For the former, the increase is 2.4%.

Good news for developers and owners? Not necessarily, explain our colleagues from RTL 5minutes. Looking at the sale of projects still in development, we can see how much change is beginning: -17.3% in one year, reveals the Housing Observatory.

When analyzing price increases, the discrepancy between recent statistics and the reality on the ground should be taken into consideration. In fact, the aforementioned statistics correspond to the period from July 1, 2021 to June 30, 2022.

The statistics therefore do not take into account the most recent figures and the explosion in interest rates from the end of the second quarter of the year. It is safe to assume that the latter will significantly influence the statistics for the last two quarters of 2022.

Finally, the evolution of sales directly influencing the average price per square meter deserves consideration. According to the Housing Observatory, interesting relocations to the most expensive municipalities are contributing to the rise in new property prices.

The conclusions presented in the recent report are therefore mixed. While the Grand Duchy once again recorded a general rise in real estate prices, a simultaneous 9.1% drop in sales, and consequently in demand, was observed.

The sector most affected by this trend is that of new real estate, sellers having more and more difficulty finding buyers. This downward trend started in early 2020.