Housing lobby group lambasts agent fees reform
Luxembourg's real estate lobby group blasted a reform that would see the government clamp down on brokerage fees in an effort to rein in exploding housing prices, denying that lavish commissions caused price hikes.
On Sunday, Minister for the Economy Franz Fayot announced the government would draft a regulation to act against real estate companies which currently take a 3% fee of the sales value of a sold property. Fayot suspected home sellers of passing on that charge to the buyer, pushing up prices as a result.
The lobby group Chambre immobilière turned the tables on Fayot on Thursday, accusing the government of "populism" and instead blaming steep property prices on failed policies.
It could not accept the proposals "since they constitute an affront against the real estate sector" and there is no proof to the government's claims that agent fees lead to higher property prices, the group said in a statement.
Instead it blames Luxembourg's ballooning property market on the state, saying it does not do enough to build affordable housing despite being one of the largest landowners in the country.
Fayot's move is a reaction to Luxembourg's rising property prices which have more than doubled in the past decade - the second-fastest rate in the European Union, leaving many unable to afford a home.
Affordable housing is a concern for the vast majority of Luxembourgers, with 82% of voters saying that they were "greatly worried" about access to affordable housing, a poll released in November found. Steep housing prices have pushed thousands to move to neighbouring Germany, France and Belgium for cheaper properties.
Fayot's announcement is the latest episode in the government's fight against ballooning prices. A pair of draft bills announced in January includes one that aims to get the state more involved in building government-supported affordable housing. The measure would create a register of affordable housing scattered around the Grand Duchy, as well as people applying for available slots.
Reining in agent fees could be bad news though for real estate agents who have flocked to the country in recent years.
Almost 400 new agencies set up shop in Luxembourg at the end of last year - a 33% rise compared to 2020, data from the economy ministry showed. In 2019 there were already 1,221 real estate agencies, the figures showed.
The Luxembourg Times has a new mobile app, download here! Get the Luxembourg Times delivered to your inbox twice a day. Sign up for your free newsletters here.