The future of the real estate market: An exclusive interview with Irfan Babacic

Rudolphe ABENRudolphe ABEN - NEXTIMMO.LU

Rudolphe ABEN

The future of the real estate market: An exclusive interview with Irfan Babacic

An exclusive interview with Irfan Babacic, one of Luxembourg's leading real estate developers.

Interviewer: Rudolphe Aben, founder of

Rudolphe Aben: Good morning, Irfan Babacic. Thank you for taking the time to speak with us today. As Luxembourg's leading real estate developer, your outlook on the real estate market is invaluable. Let's get straight to the heart of the matter. You recently made some bold predictions about the real estate market between now and the end of 2024 and in 2025. Can you explain why you think the market will rebound by the end of this year?

Irfan Babacic: Hello, Rudolphe Aben. I'm delighted to be here. Yes, I'm convinced that the real estate market will pick up again towards the end of 2024. One main reason is the expiry of government subsidies. Historically, we've seen similar patterns, for example at the end of 2008. At that time, the end of government subsidies and the subsequent market adjustment led to a significant increase in demand and property prices.

Rudolphe Aben: Can you explain this in more detail? Why do the expiry of subsidies lead to a rise in the real estate market?

Irfan Babacic: Of course. When government subsidies come to an end, there's often a sense of urgency among buyers and investors trying to take advantage of the last benefits before they disappear. This leads to a temporary increase in demand. At the same time, markets adjust to the new reality without subsidies, which often has a stabilizing effect. People have more confidence in market dynamics because they are no longer influenced by artificial interventions.

Rudolphe Aben: That's very interesting. You also mentioned that you think the market will be much better in mid-2025 than in 2023. What factors explain this optimism?

Irfan Babacic: There are several factors. Firstly, the market correction caused by the expiry of subsidies will be fully digested by then. Secondly, we expect interest rates to fall, which will reduce financing costs for buyers and investors. At the same time, significant wage increases in Luxembourg will increase purchasing power and make real estate more affordable. Thirdly, Luxembourg's population continues to grow, increasing demand for housing. These combined factors will stimulate the market and lead to a recovery. We see great potential in VEFA (vente en état futur d'achèvement) as buyers and investors regain confidence in the market and are ready to invest in new projects.

Rudolphe Aben: That sounds promising. Can you tell us a little more about VEFA and its importance for the real estate market?

Irfan Babacic: Of course. VEFA, or vente en état futur d'achèvement, is a very attractive option for buyers and investors. It enables them to buy properties still under construction, often at a lower price than for finished properties. This type of sale also offers developers a secure method of financing, as they receive advance payments. In times of market growth, such as we expect in 2025, VEFA becomes particularly attractive, as buyers can benefit from future increases in value.

Rudolphe Aben: Thank you very much, Irfan Babacic, for these detailed and enlightening explanations. Your companies are currently investing expansively. Can you explain why you're entering this expansion phase now?

Irfan Babacic: Of course. The market is currently in a recovery phase after a prolonged period of stagnation. We see this as a strategic opportunity to invest before prices rise significantly. By investing early, we can benefit from lower prices and be ready when the market has fully recovered and demand increases. It's a long-term strategy based on our belief that the market will recover sustainably.

Rudolphe Aben: Wise words. Thank you very much, Irfan Babacic, for being with us today and sharing your perspectives.

Irfan Babacic: Thank you, Rudolphe Aben. It's been a pleasure.

About the author:

Rudolphe Aben is the founder of, a leading hybrid real estate platform/agency. He works closely with many former competitors, who have become his partners. With years of experience in assessing market trends and advising investors, he writes regularly for leading Luxembourg trade magazines and lectures at real estate conferences.

About Irfan Babacic:

Irfan Babacic is a well-known figure in the real estate sector and acts as leader and founder of several major real estate development companies in Luxembourg. He has extensive experience in real estate and is particularly well known for his work in participatory financing and project management. His companies are currently investing expansively, as he is convinced that the market is in a recovery phase and that now is the right time to invest.