Price of a flat in Luxembourg doubles in eight years
The price of a flat in Luxembourg almost doubled between the start of 2013 and the end of last year, figures from the country's official statistics agency Statec showed on Thursday, just weeks after the International Monetary Fund urged the government to urgently intervene in the housing market.
A flat of 80 square metres cost buyers an average of €696,000 at the end of 2021, roughly double the price in 2013, when it was priced at €349,000.
The average price of a house in or around Luxembourg City stands at €1.35 million and the national average for a house around €900,000.
Two weeks ago, an assessment by the IMF found that the "rapid pace" of housing price growth is "posing medium-term financial stability risks" and might make the country less appealing to new and existing employees.
Prime Minister Xavier Bettel called unaffordable property "the main reason for exclusion" in Luxembourg in his state of the union speech last year. He pledged to act against rampant housing prices that have pushed thousands across the border in search of cheaper property, saying he would set up a register to tax empty dwellings to counter speculation.
However, recent government steps to address the housing shortage, such as plans to tax owners of empty dwellings and order land owners to build on their plot, may face obstacles and will take time to produce results, the IMF said in its assessment.
Empty flats and plots have contributed materially to the country's ballooning property prices by reducing the potential supply.
The government also floated the idea of putting an end to excessive brokers' fees on property sales. Currently, home sellers pay a fixed 3% fee of the sale value of the property to their real estate agent, but the government suspects they simply pass on that charge to the buyer by raising property prices, Minister of the Economy Franz Fayot said in January.
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.