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On **Thursday, June 5th, 2025**, the **European Central Bank (ECB)** announced another cut to its main interest rate, reducing the deposit rate by **0.25 points to 2%**. This marks the **eighth rate cut in a year**, sending a strong signal to households and businesses across the eurozone—and offering potential new momentum for **the Luxembourg real estate market**.

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### 🔍 Context: Inflation under control, but growth remains fragile

Since mid-2024, the ECB has gradually loosened monetary policy as **inflation eased back toward its 2% target**. In May, eurozone inflation dropped to **1.9%**, allowing the ECB to encourage investment and consumption in a context of weak demand and ongoing global trade tensions—especially with the United States.

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### 🏡 What does this mean for real estate in Luxembourg?

This rate cut is **good news for property buyers in Luxembourg**. In practical terms:

* 📉 **Mortgage interest rates may continue to fall**, improving access to financing.
* 💶 **Overall buying costs could drop**, making properties more affordable.
* 📈 **Buyer demand may rise**, further supporting the ongoing recovery of the market.

At **Nextimmo**, we've already observed a **rise in online property estimations and new listings**, reflecting renewed interest from both buyers and sellers.

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### 📊 A unique window of opportunity?

The ECB now expects inflation to remain around **2% through 2027**, with **wage growth moderating**. For the real estate market, this creates a window of **rare stability** after several volatile years. If you're considering buying, selling, or investing in property, **now may be an ideal time to move forward**.

Add to this the recent **extension of housing-related tax incentives in Luxembourg until September 30, 2025**, and all conditions seem aligned to turn your real estate project into reality.

---

### 🤝 Nextimmo is here to support you

We’re here to help you **navigate the Luxembourg property market with confidence**. Whether you’re a homeowner, buyer, or investor, our platform offers:

* Free online **property valuation** in under 2 minutes
* Free **property listing** until September 30
* Expert advice and support from our network of trusted agents

---

📩 **Ready to take the next step?**
Start your free valuation now at [**nextimmo.lu/en/estimation**](https://www.nextimmo.lu/en/estimation)

Interest rate cut: what It means for Luxembourg's real estate market

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Initially set to expire on June 30, 2025, Luxembourg's tax benefits for property buyers will now be extended by an additional **three months**, until **September 30, 2025**. The announcement was made on Monday by Finance Minister **Gilles Roth (CSV)** as part of a new bill aimed at supporting homebuyers.

### 📈 Strong Recovery in the Property Market

The minister justified this extension by pointing to the **sharp rise in property sales** since the beginning of the year. “Housing sales during the first four months of 2025 more than doubled compared to the same period in 2024,” he said.

Due to this surge in demand, **banks and notaries** may struggle to finalize all transactions on time. According to Roth, this momentum is the result of two key factors: **government tax incentives** for households and a **decline in interest rates**, which together have significantly **reinvigorated the housing market**.

### 📋 What Measures Are Being Extended?

The three-month grace period covers the following tax benefits:

* The **€20,000 rental tax credit** per individual,
* A **50% reduction of the taxable base** for registration and transcription duties,
* **Accelerated depreciation at 6%**,
* **Reduced taxation on capital gains** (at a quarter of the global rate),
* **Exemption from capital gains tax** for properties transferred for social rental purposes or meeting **A+ energy standards**.

These measures remain available provided that:

* The **preliminary sale agreement (compromis de vente)** is registered before June 30, 2025,
  **or**
* The **reservation contract** is submitted to the tax authority before that date.

In either case, **notaries and banks have until September 30** to complete the notarized transaction. A practical guide is available to help those affected by the deadline.

### 🚫 No Further Extension Planned

When asked whether the government might consider extending the deadline beyond September, Gilles Roth responded **negatively**, stating that “three months should be sufficient.”

---

## 🔐 “Bëllegen Akt” Remains in Effect

There’s more good news for future buyers: the **notarial deed tax credit** – known as the *Bëllegen Akt* – will remain at **€40,000 beyond June 30, 2025**.

This measure allows individuals to pay **no registration duties** for a property purchase up to **€571,000**, or up to **€1,142,000 for couples**.

A bill formalizing this measure has already been submitted and is expected to be **adopted by Parliament before the summer recess**, if all goes according to plan.

Housing aid measures extended by 3 months

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After a period marked by uncertainty and hesitation, Luxembourg’s real estate market enters 2025 with a sense of change. In 2023 and 2024, rising interest rates, tighter lending conditions and inflation slowed down many transactions. Sellers had to adjust their expectations, while buyers faced more demanding financing terms.

Today, the signs of a gradual recovery are emerging. But does this return to balance signal lasting stability, or the beginning of a new, still-uncertain cycle? This article explores the trends to watch, the opportunities to seize, and the challenges Luxembourg’s property market faces in 2025.

## 1. Where does Luxembourg’s real estate market stand in early 2025?

### A slowly evolving market

Early 2025 data indicates a general price stabilization, with slight corrections in certain segments, especially in new builds. While some buyers hoped for drastic price drops, these haven’t materialized. However, the balance of power has shifted, prompting sellers to adopt more realistic pricing strategies.

### Credit: more stable, but still selective

Despite a slight relief in interest rates, mortgage conditions remain strict. Banks continue to demand strong guarantees, limiting access to property ownership, especially for first-time buyers. However, buyers with stable profiles and long-term investors are benefiting from better negotiation conditions.

### Slower pace in new construction

The decline in building permits since 2023 is already affecting housing availability. High construction costs, complex environmental regulations, and scarce land have slowed the pace of new developments, creating upward pressure on the residential market for the mid-term.

## 2. The key factors reshaping the market

### a) Political and fiscal measures

To address the housing shortage, Luxembourg’s government has introduced several measures to stimulate supply and encourage homeownership:

- Temporary reduction in registration duties
- Tax credits for energy-efficient renovations
- Support for affordable housing initiatives

These efforts aim to revive transaction flow while aligning with sustainability goals.

### b) A selective yet persistent demand

Buyers haven’t disappeared from the market—they’re simply more informed, patient, and selective. Properties that are poorly located or overvalued tend to linger. On the other hand, homes that are well-situated, energy-efficient, and aligned with current preferences (outdoor space, proximity to services, flexible layouts) continue to sell well.

## 3. What are the opportunities for sellers and investors?

### A window of opportunity for strategic sales

For sellers, 2025 offers conditional opportunities. A well-evaluated and professionally marketed property can sell within reasonable timeframes, without compromising on price. Discreet strategies such as off-market sales, increasingly popular in the premium segment, allow owners to protect the property’s value while targeting serious buyers.

### A renewed interest in property investment

After a period of hesitation, real estate investment is gaining appeal again, particularly in segments like:

- Compact apartments in urban centers
- High energy-performance properties (A or B class)
- Shared housing (coliving) in well-connected areas

With rental demand still high, rental yields remain competitive, especially for assets acquired at negotiated prices.

## 4. The challenges ahead

### A persistent housing shortage

Despite market adjustments, demand still far exceeds supply, particularly in high-demand municipalities such as Luxembourg City, Bertrange, or Esch-sur-Alzette. Without a boost in construction and simplification of planning processes, this imbalance is likely to persist.

### Housing affordability

Household purchasing power remains under pressure. The challenge in 2025 will be to strike a balance between regulation, incentives, and innovation, such as cooperative housing models, intergenerational living, or modular development solutions.

## Conclusion

2025 marks a transition for Luxembourg’s real estate market—toward greater rationality, selectivity, and resilience. While the cycle has shifted, the fundamentals remain strong, and informed stakeholders have much to gain.

At Nextimmo, we guide our clients through this evolving landscape with clarity, expertise, and tailored strategies. Whether you’re looking to sell, buy, or invest in 2025, our team is here to support you with insight and precision.

Thinking about making a move? Get in touch with us for a personalized property valuation or a strategic consultation.

Luxembourg 2025: entering a new era in real estate?

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**Should you buy or rent a property in Luxembourg?** This question keeps coming up — especially in a shifting real estate market. While renting has long been seen as more flexible and less risky, the tide is turning in 2025. With falling property prices, rising rents, and improved lending conditions, **buying is once again becoming a winning strategy**. Here's why.

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## 📉 1. Property prices are finally falling

After years of uninterrupted growth, the Luxembourg real estate market began to cool in 2022. We are now seeing a clear **correction phase**.

👉 **What this means:**
Many properties are now listed at **more reasonable prices**, with greater room for negotiation.

> According to recent data, average sale prices dropped by **8–12%** in several municipalities between 2022 and 2024.

For buyers who were waiting for the right moment, **that moment may be now**.

---

## 📈 2. Rents continue to rise

Unlike property prices, **rents keep increasing**. Driven by population growth, housing shortages, and Luxembourg’s overall appeal, **the rental market remains under pressure**.

> In Luxembourg City, the average rent for a two-bedroom apartment now exceeds **€2,000 per month**.

That’s a significant expense — and one that **does not build any equity**. In comparison, **well-structured mortgage repayments can be similar or even lower**, while allowing you to become a property owner.

---

## 💡 3. Buying means building long-term value

Buying a home is not just about having a place to live — it’s also a way to **secure and grow your capital**.

* You **stabilise your monthly expenses**, unlike rent which is subject to inflation.
* You **build equity** with every monthly payment.
* You **protect your savings** from losing value over time.

Even in a fluctuating market, **well-located properties in Luxembourg tend to retain their value** over the long term.

---

## 🏦 4. Better lending conditions — new opportunities

There’s good news for buyers: **Luxembourg banks are gradually easing lending conditions again.**

* Mortgages up to 30 years are coming back
* Interest rates are more stable
* More support is available for first-time buyers
* Discounts on notary or processing fees are more common

👉 This means that **a wider range of people can now consider buying**, even after the challenges of the 2022–2023 cycle.

---

## ✅ 5. Buying in 2025: A more strategic decision

In uncertain economic times, buying property is more than a financial move — **it’s a strategic choice**:

* You **safeguard your capital** against inflation
* You **protect yourself from rising rent prices**
* You **invest in a real asset** in one of the most stable and attractive countries in Europe

💬 **In short:** Buying is no longer a luxury or a gamble — **it’s becoming a realistic, forward-thinking choice** for many households.



 Buying vs renting in Luxembourg in 2025?

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As the market remains under pressure, the Luxembourg government is shifting its approach: reducing general subsidies while maintaining targeted support for homebuyers. In this context, the **existing property market** plays a growing stabilizing role, while the **new build sector** continues to struggle.

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## 🎯 Tax Incentives Ending – But “Bëllegen Akt” Remains

Speaking before Parliament, Prime Minister Luc Frieden confirmed that the state would not continue to support the housing market indefinitely. The **temporary tax relief measures introduced in 2023** to reduce acquisition costs will **expire on June 30, 2025**. One key measure remains: the **“Bëllegen Akt” tax credit**, which provides up to **€40,000 in notary fee reductions**. It continues to benefit especially young households looking to buy existing properties — a simple, effective, and still popular form of support.

---

## 🧱 New Construction Under Pressure: Fewer Sales, Limited Momentum

Despite positive economic forecasts for 2025, the **new construction sector** remains in distress. According to the **Chamber of Skilled Trades**, business activity remained negative in Q1, with a balance of -15. The industry lost **4,600 jobs in 2024**, and **VEFA (pre-construction sales)** remain well below pre-2020 levels. Since 2022, **over 5,000 fewer units have been sold** compared to the 2014–2020 average. Although there was a small rebound at the end of 2024, the outlook remains uncertain.

---

## 🏢 Public Sector Demand Supports a Fragile Market

With **private demand still too weak** to revive the market, the **public sector** has become the main driver of activity. Over **35% of recent sales** were conducted by or on behalf of the State, the Housing Fund, or the City of Luxembourg. The **Housing Fund**, which focuses on affordable housing, reported **no construction halts**, and plans to deliver **1,300 new affordable homes by 2029**. This institutional support limits the downturn, but cannot alone restore balance to the market.

---

## 🧭 A Fragile Stabilization: Professionals Urge Adjustments

Industry voices remain cautious. **Michel Reckinger**, president of the UEL, acknowledged that “the market has likely hit bottom,” but a real recovery is not yet underway. He suggested a technical adjustment: eligibility for tax benefits should be based on the **date of the sales agreement (compromis de vente)** rather than the notarial act, to account for current delays with notaries. Meanwhile, the **Chamber of Skilled Trades** warned that the **abrupt end of tax support could suffocate a fragile recovery**. Buyer confidence remains fragile — clear and consistent policy signals will be crucial in the coming months.

---

### 📌 Key Takeaways

* **Temporary tax incentives end on June 30, 2025**, except the “Bëllegen Akt” (€40,000 max).
* **New construction remains weak**, with job losses and fewer pre-sales.
* **Existing properties benefit from stable support**, and remain more accessible to buyers.
* **Public sector demand is currently keeping the market afloat**, but private demand must return.

---

At **Nextimmo**, we closely monitor market developments to support buyers and sellers alike. Whether you want to **sell your existing property** or explore opportunities in new builds, our platform is here to guide you. Feel free to **request a free valuation** or **browse our updated listings**.


Real Estate in Luxembourg: Between new build slowdown and fragile recovery

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After several months of tension in the Luxembourg real estate market, **all signals are finally turning green**.  

Economic indicators, public policy, and pricing dynamics are aligning: **now is the ideal time to (re)launch your real estate project.**

### 📉 Prices have hit rock bottom... and are slowly rising

Recent statistics show that **property prices have reached their lowest point**, particularly in the existing housing market.  

Even better, **a slight increase has already been observed**, indicating a gentle recovery is underway.

👉 If you are **selling to buy**, you benefit from a double opportunity:  

while you may sell at a slightly lower price than in 2021–2022, **you also buy at a reduced price**, which offsets the difference.

### 💶 Interest rates set to fall

The **European Central Bank has announced an imminent rate cut**, which is expected to result in more attractive mortgage conditions by summer.

👉 This means for buyers:

- **Increased borrowing capacity**  

- **Lower monthly payments**

- A more dynamic market thanks to a **return of buyer confidence**

### 🏠 Don't miss the current housing aid

The Luxembourg government has introduced a **special housing aid scheme**, available **until June 30, 2025**.

This is a major opportunity, especially for **first-time buyers**, who haven’t seen such favorable conditions in years.

---

## 🚀 Our advice: act now

### ✅ If you're a seller

- **[Get your property appraised](https://nextimmo.lu/en/estimation) now**

- Prepare an efficient listing: realistic pricing, professional presentation, quality photos

- Be ready to meet a serious buyer in the coming weeks

### ✅ If you're a first-time buyer

- **Start your search today**

- Check your borrowing capacity — including with government aid

- Be proactive: quality listings are likely to move faster as the market recovers

---

At **Nextimmo.lu**, we support you in this new phase of the market with smart digital tools, a responsive team, and carefully curated listings that match your goals.

📩 **Need an opinion, a property valuation, or tailored advice?**

[Contact us](https://nextimmo.lu/en/contact) in just a few clicks — and make the most of this window of opportunity!


Luxembourg real estate: why now is (really) the right time to buy or sell

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On **April 17, 2025**, Christine Lagarde, President of the European Central Bank (ECB), confirmed what many had anticipated: the disinflation cycle is now underway, and monetary policy is entering a new, more accommodative phase.  
Just a few days earlier, on **April 11**, the ECB had already cut its deposit rate from **4% to 3.75%**, marking a symbolic first step after two years of tight monetary policy.

This long-awaited shift comes as inflation slows significantly (2.4% in March 2025), even as economic growth remains fragile.  
Lagarde remained cautious, describing the recovery as still “vulnerable,” and pointed to international tensions — especially the **20% U.S. tariffs on European manufactured goods** — which could dampen household and business confidence.

---

### **Credit conditions may begin to ease**

For borrowers, the rate cut sends a positive signal:  
Financing conditions could gradually improve, even if banks remain vigilant.  
As a result, **many real estate projects put on hold due to high interest rates could restart** in the coming months.

For buyers and investors alike, this signals a **gradual return of confidence** — a shift that could accelerate if further rate cuts follow in the months ahead.

---

### **And in Luxembourg?**

The Luxembourg real estate market, which had seen steady price growth for years, experienced a sharp slowdown since 2022, particularly in **new developments**.  
The ECB’s decision could offer fresh momentum to potential buyers, especially those who had been waiting for a clear signal to re-enter the market.

**Industry professionals now anticipate a gradual rebound in transactions**, supported by improved borrowing capacity and a clearer economic outlook.

---

### **A time of transition — full of opportunity**

This rate cut does not yet signal a return to easy money, but it may well represent a **strategic turning point for those planning real estate projects**.  
It’s time to be ready: those who act first may benefit from the best conditions.

At **Nextimmo**, we closely monitor market trends to help guide you through every step of your real estate journey.  
If you're considering buying, selling, or investing, now is the time to review your strategy.


The ECB begins easing: what impact on real estate?

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Reducing property management costs while maintaining high service quality is a major challenge for property owners and managers in Luxembourg. However, by adopting the right strategies and technologies, it is possible to optimize expenses without compromising tenant satisfaction. Here are some effective solutions.

## Automate to improve efficiency

Automating administrative tasks helps reduce costs and human errors while improving daily property management.

•	Use property management software to automate rent tracking, contract management, and tenant communication.

•	Implement automated payments to minimize delays and improve cash flow management.

•	Adopt a real estate CRM to streamline request tracking and optimize interactions with clients and service providers.

## Focus on preventive maintenance

A proactive approach to maintenance reduces unexpected expenses and extends the lifespan of equipment.

•	Schedule regular inspections to detect issues before they become costly.

•	Negotiate maintenance contracts with reliable service providers to secure preferential rates and optimized follow-ups.

•	Invest in durable materials and equipment to limit frequent repairs.

## Optimize rental expenses

Analysing energy costs and shared property fees can reveal potential savings opportunities.

•	Conduct an energy audit to reduce consumption and improve efficiency.

•	Compare and negotiate contracts with suppliers (electricity, water, heating, cleaning, security).

•	Encourage eco-friendly practices among tenants to limit overconsumption and unnecessary expenses.

## Leverage new technologies

Integrating digital tools and smart solutions can help reduce costs while improving management efficiency.

•	Smart home technology: automate heating regulation, led lighting, and consumption sensors.

•	Centralized management platforms for real-time property operations tracking.

•	Collaborative tools and cloud solutions to facilitate remote management and enhance communication between owners, tenants, and service providers.

## Conclusion

Optimizing property management without compromising service quality requires a strategic combination of digitalization, preventive maintenance, and cost control. By adopting these solutions, you can ensure effective and profitable property management while maintaining tenant satisfaction.

Need personalized support for your property management? Contact our experts at Nextimmo.

How to reduce real estate management costs without sacrificing quality?

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In a competitive real estate market like Luxembourg, reducing sales time while maximizing profitability is crucial. Strategies include optimizing digital marketing, utilizing virtual tours and augmented reality, and preparing properties carefully with home staging and professional photography. Setting a competitive price and managing offers efficiently are also key to speeding up sales.

## 1. **Optimizing digital marketing**
Digital marketing is a powerful tool for attracting potential buyers quickly. Targeted advertising campaigns on platforms like Google Ads and Facebook can help reach buyers based on online behaviour, location, and interests. Additionally, a strong content strategy with SEO optimization, blogs, and videos will generate organic traffic and increase property visibility.

## 2. **Using technology for virtual tours**
Technology plays a significant role in speeding up real estate sales. Virtual tours allow buyers to explore properties remotely, thus shortening decision-making times. Offering 360-degree tours or integrating augmented reality can help potential buyers visualize changes or modifications, greatly facilitating the sales process.

## 3. **Preparing the property for sale**
A well-prepared property sells faster. Home staging enhances the property’s appeal, making it more attractive to buyers. High-quality professional photos ensure the property’s potential is captured accurately, providing an excellent first impression.

## 4. **Setting a competitive sale price**
Pricing is a critical factor in the speed of sale. Conducting a comparative market analysis is vital to position the property at an optimal price. Being ready to adjust the price if necessary can attract more buyers and make a significant difference in the property’s market performance.

## 5. **Efficient offer management**
Once offers are received, acting swiftly is crucial. Prompt responses and quick negotiations help ensure that opportunities are not missed. Regular follow-ups and clear communication can turn initial interest into a closed sale.

## Conclusion
To accelerate real estate sales cycles in Luxembourg, a blend of digital marketing strategies, modern technology, and proactive offer management is essential. By optimizing each stage of the process, you can reduce sales time and increase the chances of closing deals quickly, giving you an advantage in the competitive Luxembourg real estate market.

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