© Domingos Oliveira/ RTL Luxembourg
Property prices are once again climbing in the Grand Duchy's real estate market – with significant growth rates exceeding the rate of inflation.
While the first quarter of 2025 was particularly quiet in the real estate sector, the atHome group confirmed on Monday that "buyers are back" and prices are increasing across all regions of the country. The reason behind this sudden surge is well-known: the expiration of the housing aid package, which ends on 1 July.
Although no data is yet available for transaction volumes in the second quarter, industry experts foresee a clear rebound following the year's sluggish start.
What exactly does the quarterly reported from Luxembourg's leading property portal reveal? First, that that prices have increased significantly between the first and second quarters of 2025.
The prices of existing houses rose by 4%, older apartments by 3.7%, and new apartments by 6.1%. Over a 12-month period, the average price growth appears less dramatic, especially for older apartments, which rose by only 0.7%.
Overall, the market is returning to the price levels observed in the second quarter of 2024, with price increases remaining notable for houses (+4.9%) and new apartments (+4.3%) over the past year.
A particularly striking development is seen in the sale of properties in future state of completion (VEFA), where the average price per square metre has once again surpassed the €10,000 threshold. According to atHome, it now stands at €10,411 – although it is worth noting that these are listing prices from property ads, which may differ from final sale prices.
The price map published in the same atHome report offers a regional snapshot of price trends. Notably, prices for new apartments have surged in the west (+10.5%) while they dropped in the east (-6.5%). These changes, however, should not be over-interpreted, as they can be heavily influenced by pricing in large-scale development projects.
Nonetheless, one dominant trend stands out this quarter: rising house prices throughout Luxembourg.
AtHome also emphasises this in its press release: the upward price trend is intensifying, driven by older houses. It is important to remember that price increases had already begun, albeit modestly, in the first quarter of 2025.
But what will happen when government housing subsidies are lifted on 1 July? And how will prices react to fixed interest rates that appear stubbornly stuck above the 3% mark?
Rental prices also climbing
Announced rental prices are also increasing around Luxembourg, especially for houses, which have risen by 8.8% since the start of 2025. Although less significant, atHome also notes rents for apartments have increased by 4.4%.
Seen over a year, these increases seem less dramatic, with +4.3% for houses and +1.4% for apartments. However, in a rental market that depends entirely on tenant incomes, even these modest increases can have a key impact.
The rent map shows that only one region saw a decline over the span of a year: in the eastern parts of the Grand Duchy, house rents dropped by 7.2% as opposed to the second quarter of 2024. Apartment rents in the east saw a much smaller decline (-0.8%).
In the north, house rents fell by 4.2% and in the west by 1.8%. Still, these decreases were not sufficient to offset national trends, with the average rent in Luxembourg still rising by 4.3%.
The atHome group adds that these variations can be explained by "regional disparities in supply, demand, and attractiveness". The real estate portal also notes that rents had gone through several quarters of decline before this trend reversed.
