© Maxime Gonzales/ RTL Luxembourg
Prices increased in the first quarter of 2022 despite a downturn in activity on the real estate market. However, the increase only affected part of the Luxembourgish market.
The most recent statistics show that despite a decline in activity on the real estate market, the price of existing residences in Luxembourg is still rising.
Over the past year, the price per square metre has climbed by 12.8% and by 1.6% over the preceding quarter. But only existing flats are impacted by this rise. When it comes to flats that are still under construction, "the price per square metre is quite volatile".
According to the National Housing Observatory's most recent report, the market for new homes experienced a "net decrease" in the first quarter of 2022 (-6.1%) after experiencing a significant surge in the last quarter of 2021. The decrease was also observed over a one-year period, even if it was much more modest at -1%.
However, "this decrease in the price per square metre must definitely be put into context", caution the experts of the National Housing Observatory. In fact, it is "in considerable part" due to a shift in sales away from the capital to more peripheral areas where prices "tend to be lower".
Data from the National Institute of Statistics and Economic Studies (STATEC) reveal that the price increase is still "substantial" in the section of apartments that are still under construction, according to Julien Licheron, an expert at the National Housing Observatory. "+8.6% once we correct for changes in the quality and location of pre-fabricated properties," according to Licheron.
And this is not the first time that prices per square metre of flats under construction have decreased compared to the previous quarter. Licheron cites the 2nd and 3rd quarters of 2021 as examples and reaffirms the importance of the hedonic index which "gives a more accurate picture of changes in pricing".
Take a look at this article as well about the analysis of the problems on the property market in Luxembourg.