Luxembourg Real Estate Crisis: Understanding and Navigating the Current Market

Rudolphe ABENRudolphe ABEN - NEXTIMMO.LU

Rudolphe ABEN

Luxembourg Real Estate Crisis: Understanding and Navigating the Current Market
  • Has the real estate market in Luxembourg really changed? We're in the middle of a real estate crisis - nothing sells in Luxembourg anymore!
  • Oh, really? If that were the case, many more real estate agencies would have gone bankrupt by now.
  • We're still selling. Demand in Luxembourg remains enormous, and the country remains attractive. Supply is far from being able to meet this demand.
  • Yes, but why can't I sell my property?

For some of the properties in our portfolio, there's no movement at all. For others, it's business as usual, with numerous contacts and visits. In recent years, prices have risen much faster than salaries. As far as banks are concerned, "cheap" loans are a thing of the past. Over a longer period, a rate of 4-5% is not abnormal. In the short to medium term, it is highly unlikely that interest rates will fall significantly. Today, we are witnessing a rebalancing. Supply is slowly returning to a price level that meets demand. Some are even talking about a drop of up to 25%.

For some owners, by choice or obligation, the price is fixed. Unfortunately, these properties won't sell. Depending on the case, they may remain on the market for several years or be seized by the bank. Even if a buyer is found at a high price, with banks valuing properties in detail, they no longer support buyers if the property is overvalued. This is the case even if it's within the applicant's budget.

Owners who are willing to take a step towards buyers sell their property. And often with a handsome capital gain, since the real estate market has historically been very good. The exception to this rule is for properties purchased within the last two years.

Want to sell your property? How do you go about it?

Above all, don't rely on the prices posted on real estate portals. They usually give a very overestimated idea of reality. Have your property appraised by someone who knows the market. This is the job of the real estate agent. They spend 40 hours or more every week doing this.

Want to buy a property? Where do you start?

Visit a credit broker or bank to find out how much you can borrow. That's before you start visiting properties. We can give you some contacts. Don't think you can offer 20% less for every property on the market. Although many properties are overpriced, some aren't and sell very quickly. Bidding too low can mean missing out on great opportunities. If you're not sure, ask an agent to represent you.