Luxembourg house prices more than doubled since 2010
House prices in Luxembourg more than doubled between 2010 and 2022, the EU's statistics agency said on Tuesday, a rise that is well above the bloc's average, as the country grapples with a major housing crisis.
The cost for a house or flat skyrocketed by 140% in the last 12 years in Luxembourg, Eurostat said, a growth that is significantly higher than the EU average of 49% in the same period.
With Estonia at 199% and Hungary at 174%, only two EU countries have marked an even steeper surge in real estate prices than Luxembourg over the period stretching from the third quarter in 2010 to the same quarter in 2022. Greece at -22%, Italy at -9% and Cyprus at -0.3% are the only EU countries which saw a decline in house prices.
However, the growth in rent prices in Luxembourg did not match exploding property prices, with the country recording an increase of close to 20% over the last 12 years, according to Eurostat. This is broadly in line with the EU average.
Housing costs in the Grand Duchy - how much people spend on living in, running and maintaining a property - were 87% higher than the EU average last year, only trailing behind Ireland which was 94% more expensive, according to a separate Eurostat report published last month.
The rise in property prices in Luxembourg has slowed somewhat in recent months, going up by 2.4% on average at the start of October compared to a year ago. The cost of existing properties is outpacing new builds as construction costs have increased and there have been delays in getting materials, real estate website atHome previously said.
The long-term soaring of property prices led the government to table a couple of proposals that would see the state levy taxes on unoccupied properties and vacant land in Luxembourg.
The new tax policies aimed at forcing the owners of empty homes and plots of land to sell up or rent out are not intended to lower property prices in Luxembourg, Housing Minister Henri Kox has said, adding that the country cannot afford a recession.
Luxembourg's tradesmen lobby accused the government of "scaring away" private investors with the draft law that would slap taxes on vacant dwellings, a move that would come at a time when more private cash needs to flow into the property market.
Rising interest rates, increasing wages and exploding material and energy costs are all weighing on the construction sector and will lead to a third of already approved flats not getting built next year, the Fédération des Artisans said last month. That means 1,500 out of 3,800 units will not see the light of day next year, a shortage that the sector will not be able to make up in years to come.
Real estate developers are already trying to lure people to buy off-plan homes as potential buyers are becoming increasingly concerned about an uncertain price tag and an unclear move-in date for new build properties, real estate experts previously said.
Three quarters of respondents in a survey in November said they were “greatly worried” about access to affordable housing, the top concern among Luxembourg voters.
Although 70% of people living in Luxembourg are homeowners – the same percentage as the EU average – 16 other EU countries had a higher share, according to Eurostat. The highest was Romania, where 95% of people own their home, followed by Hungary and Croatia. Germany was the only country to have an equal split of homeowners and tenants.
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