€400,000 for a parking space on Boulevard Royal, €90,000 in Cloche d'Or or Bonnevoie. The prices of garages and parking spaces are skyrocketing in the capital and elsewhere. How do estate agents explain this phenomenon?

There is no doubt that a private parking space in the capital is worth - so to speak - gold today. A quick web search reveals that a 30m2 closed garage box in Bonnevoie is displayed at €135,000 on the website of My Loft Lux Real Estate. JLL Residential offers a space in the Monterey car park in the city centre at €160,000. And the Europrom agency is currently selling an "ultra-modern" parking space in the old town – lift included – for no less than €185,000.

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© (Photo: Europrom)

Extreme cases? No doubt about it. But there are others, such as a lot consisting of a garage and five parking spaces located in a courtyard in Bonnevoie. Listed for €625,000 by a real estate agency in the south of the country, the lot represents a surface area of almost 1.5 acres.

In the brand-new 'Tours Zenith', which tower over the Cloche d'Or shopping centre, an indoor parking space sells for between €85,000 and €89,000. For the same price (€89,000) a closed garage in the heart of Bonnevoie was offered until recently.

Not only was it a large garage (25.6 m2) with electric door, electricity, and running water, but it was the fourth lot (out of four) of a co-ownership. This type of situation "is quite rare and that's what explains its price", says Brice Correia, founder of Movin' Real Estate. He confides that "the garage has been sold at almost the original asking price", just recently.

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© Novin' Real Estate

There is something for everyone and, depending on the location and the neighbourhood, prices vary from €45,000 to €400,000. "On Boulevard Royal, an interior location is negotiated for close to €400,000. A dozen years ago, it was trading at around €110,000", Correia says, who knows the area well, as his estate agency is well established there.

Where does the craze for parking spaces come from?

All real estate agents in the area confirm that the prices of garages and car parking spaces are "increasing with the prices of other properties", as Mirza Babacic, real estate agent at Remax Immo Power, summarises. Even if housing remains affordable in some municipalities, housing prices have exploded since the beginning of the Covid-19 health crisis in Luxembourg. This trend is clearly continuing. And Luxembourg City has once again become the champion of the price per square metre.

Prices have risen so much everywhere, not just in Luxembourg City, that investors are struggling to buy flats, and are instead turning to car parks, according to Carol Fabbri of the My Loft Real Estate Agency. As she sees it, "the demand for garages is enormous in Luxembourg City, but also in Differdange and in the whole of southern Luxembourg".

A garage or a parking space "is a smaller investment and it's safe", Babacic explains, adding that it costs less to buy and there are fewer risks when renting. "If the tenant doesn't pay, you block the place or change the lock and it's fine", Babacic says.

Renting is less restrictive, maintenance is almost non-existent, and resale with added value is guaranteed. A garage or parking space "can be resold immediately and anywhere", according to Correia. Currently, garages and parking spaces sell in 48 hours, he says.

A quick look around the web also shows that the supply is limited. Rarity is another factor that contributes to the price. But Brice Correia does not see the current craze for parking spaces as a new form of property speculation. A garage "is not a speculative investment", but an object that responds to the stark reality of Luxembourg's capital for motorists: "People have parking problems. They need places to park, and they can't find any!", according to Correia.