Minister reacts to property market report'Developers and estate agents contribute to soaring housing prices'

According to the Minister of the Economy, “developers and estate agents have largely contributed to the surge in housing prices in recent years.”

The report, published on Wednesday morning, revealed that developers’ gross margins increased nearly eightfold between 2010 and 2020, despite minimal growth in the number of new homes built.

-> Competition Authority: Report on property market raises several red flags

In his statement, Fayot highlights the following findings from the report:

• 83% of building land is owned by a handful of companies and individuals, leading to speculation that drives up house prices.

• Developers often work together, not respecting competition rules.

• The suspicion of construction companies intentionally underpaying their workers is said to result in a labour shortage and a slowdown in construction.

• Fayot also pointed out that he had previously drawn attention to the 3% commission demanded by estate agents, which further contributes to rising property prices.

As Minister for Competition, Fayot announced that he will refer the results of the investigation to the Government Council.

“We must do everything we can at every level to solve the housing problem in Luxembourg,” Fayot added. In particular, tighter supervision and improved regulation of developers and estate agents are deemed essential measures to tackle the issue effectively.