Real estate in Luxembourg: towards price stabilization in 2024?

After a period of free-fall in real estate prices in Luxembourg due to the market downturn, a glimmer of hope seems to be emerging on the horizon. The first quarter of 2024 saw an increase in the number of transactions, a sign that buyers are gradually regaining confidence in the market. But what are the prospects for those aspiring to become homeowners?

Firstly, the supply remains relatively abundant, providing a range of choices for potential buyers. Additionally, prices have undergone a significant decrease, ranging between 20 and 30% depending on the municipalities, making real estate accessible again for many buyers. Although mortgage rates are still far from their pre-crisis levels, a downward trend is beginning to emerge, especially for fixed rates. Furthermore, even by contracting at a relatively high rate, it may be possible to renegotiate it in a few years through refinancing.

Real estate remains a major issue in the Grand Duchy, and ensuring the construction of new housing to rapidly increase supply could prove to be a challenge. Nevertheless, the measures implemented by the government to stimulate the market should mitigate the effects of the crisis and revive it in the short term. Therefore, an increase in demand is expected in the coming months, which should help stabilize prices by the end of the year. For tenants considering staying in Luxembourg long term, it is time to develop a strategy to finally achieve homeownership.

Real estate prices are expected to stabilize throughout the year, and the timing is right to search for your future home. When rates drop below 3% (currently the fixed rate is at 3.5%), prices will rise again due to the lack of supply. After hitting rock bottom, real estate prices are expected to rebound, which is a logical consequence of emerging from the crisis, thereby stimulating economic growth.

When real estate is thriving, it can be a positive sign for all other economic activities. Therefore, let us follow this path towards a prosperous future, within our own homes!

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