© Maxime Gonzales/ RTL Luxembourg
While the sales rate on the housing market is low, rents have started to rise sharply and there seems no end in sight. Our colleagues from RTL 5minutes discussed these trends with Jean-Nicolas Montrieux, CEO of Inowai Group and advocate of an open discussion with the government.
With interest rates and sales prices continuing their upward trend and buyers seeing their purchasing power diminish, many residents have no choice but to turn to renting despite soaring prices or even moving across the border. "There is cause for concern," says Jean-Nicolas Montrieux, CEO of the Inowai agency and one of the latest experts to sound the alarm.
Jean-Nicolas Montrieux, CEO of Inowai Group
"The sales market is completely frozen", confirms the CEO and warns that the rent offer also has its limits. According to him, "rents are already soaring" and the situation might deteriorate even further as a significant rise in rents would be "socially unacceptable".
To prevent the situation from becoming even more complicated, he believes that construction efforts must be relaunched by encouraging investment through tax incentives. Montrieux is further convinced that the heart of the problem is the "brutal" rise in interest rates. But, this is a parameter that does not seem to be changing any time soon.
This is why he believes that we must act by activating other levers: "We need to give guarantees to investors again" with, for example, a return to accelerated depreciation of 6% and a possible turn to professional investors. "We need to motivate people to buy", he insists.
Without intervention of the Luxembourg government, Montrieux is convinced that "there will be a breaking point" on the property market. "For the time being, we have not resorted to partial unemployment," he says, explaining that this is due to the diversification of the Inowai group's activities.
However, he admits that "if it lasts, we will have to take decisions". In this context, he pleads for a discussion between the private sector and public actors.