Luxembourg government's strategy to revitalise housing sector

VEFA, which stands for vente en l'état futur d'achèvement ("sale in future state of completion"), denotes properties either planned or currently under construction, purchased by the public sector to stimulate the housing market. New figures shared by the government shed light on the programme's impact and scope.

The initiative was announced by the previous government in the summer of 2023, aimed at sustaining activity in the construction industry and fostering the creation of more affordable housing.

Initial contracts were signed at the outset of September 2023, reserving 114 residential units totalling €69 million. Subsequently, the initiative has expanded, with 170 flats now earmarked for acquisition, amounting to approximately €110 million. The average purchase price stands at €7,320 per square metre, including parking spaces.

Of the total units, 85 are designated for rental based on social criteria, facilitated by the Housing Fund and the National Society for Affordable Housing (SNHBM). These units will be gradually made available through 2028, with two units slated for occupancy by year-end, seven by the following year, 76 in 2027, and an additional 85 in 2028.

Plans for the acquisition of an additional 70 VEFA flats are currently under review at the Ministry of Finance, with a further 90 units in the pipeline.

The current government has allocated a budget of €480 million for VEFA, which is expected to translate to the purchase of approximately 800 residential units.

All of these figures were disclosed by Minister of Housing and Spatial Planning Claude Meisch in response to a parliamentary question from the Left Party (déi Lénk). In a separate inquiry, the Pirate Party sought information on vacant homes within SNHBM. Minister Meisch clarified that there are none, with any unoccupied units undergoing renovation or soon to be offered for rent.

As for sales, 125 flats remain available, some of which are still undergoing construction.