The Housing Observatory's quarterly report signals renewed activity in Luxembourg's residential market, driven by strong demand for existing properties.

On Thursday, the Ministry of Housing released the Housing Observatory's report on residential property market trends for the third quarter of 2024. The findings indicate increased activity in the existing homes market and a stabilisation in sales prices.

Sales of existing flats – properties already built – rose by 44% year-on-year. In contrast, sales of off-plan flats (VEFA) remain sluggish. The Ministry highlighted this in its press release, noting that "the number of transactions is still almost four times lower than the average for the years preceding the sharp decline in activity in 2023."

The recovery in the existing property market extends to houses, where sales increased by 64% compared to 2023. However, the off-plan segment continues to struggle, with just 144 transactions recorded in the third quarter–still four times fewer than pre-2023 levels.

The report also confirms a slowdown in the decline of property prices during the third quarter. Sales prices have stabilised, showing little change over the period. Over the year, there was a slight decrease of 1.7%.

For existing flats, prices fell by 3.6% year-on-year, a decline attributed exclusively to the sharp drop in the fourth quarter of 2023, according to the Ministry. Existing house prices saw a modest 2% increase during the third quarter, remaining stable over the year. Meanwhile, prices for flats under construction declined by 2.6% year-on-year.

Rents for advertised flats decreased slightly in the third quarter, down 1.6% from the previous quarter. However, rents for new leases remain 3.6% higher compared to the same period last year.