House prices jump by more than 10% in space of year
House prices in Luxembourg jumped by more than 10% in the first quarter of this year compared to 2021, according to official figures released on Wednesday, amid some signs the country’s property market may be cooling.
There was a 10.5% rise in house prices – combined both existing and new properties – in a year, a report by Luxembourg’s statistics agency Statec and housing research body Observatoire de l’Habitat said.
That was a lower increase than the 12% to 15% annual rise house prices have shown since 2018, reaching a maximum of 17% in 2020. Few countries have seen property prices jump as sharply as the Grand Duchy in recent years.
The spike in prices also came amid a drop in the number of transactions, which fell by more than 2% compared to the first quarter of 2021. The average price of an apartment in Luxembourg now stands at €688,428.
Luxembourg would need to build close to 7,500 additional properties annually between now and 2026 to keep on top of rising demand, a think tank said on Tuesday, warning that the country's housing crisis could worsen significantly.
Real estate in Luxembourg almost doubled in value in the decade from 2010, the third-highest increase in the EU, with the International Monetary Fund warning that the Grand Duchy needs to take urgent action to cool the housing market.