Real estate prices in Luxembourg continue rising despite a significant decrease in demand.

According to the latest statistics published by the Housing Observatory, the average square-metre price for new real estate increased by 8.2% over the course of one year. For existing real estate, the increase was 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, one can observe how a change is starting to unfold: -17.3% in one year, reveals the Housing Observatory.

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

The statistics therefore fail to include the most recent numbers and the explosion of interest rates from the end of the year's second quarter. It is safe to presume that latter will significantly influence the statistics of the last two quarters of 2022.

Finally, the shift in sales directly influencing the average square-metre price warrants consideration. According to the Housing Observatory, the relocation of interest to the most expensive municipalities contributes to the price increase for new real estate.

The findings presented in the recent report are thus mixed. While the Grand Duchy once again records a general increase in real-estate prices, a simultaneous 9.1% decline in sales, and by consequence demand, is being observed.

The sector most impacted by this tendency is that of new real estate, with sellers increasingly struggling to find buyers. This downward trend first started at the beginning of 2020.