des-drapeaux-europeens-sont-vus-devant-le-batiment-de-la-bce-a-francfort (1) (1).jpeg

_Economists agree that the European Central Bank (ECB) will cut its key interest rates by 25 basis points this week, marking the first long-awaited decrease in five years._

The Governing Council of the ECB will meet this Thursday, June 6, to announce, for the first time in almost five years, a decrease in the key interest rates for banks in the eurozone. This 25-basis-point reduction comes despite uncertain macroeconomic circumstances and persistent inflation. Experts anticipate several rate cuts by the end of 2024, each by 25 basis points. However, the overall decrease this year will strongly depend on GDP growth and the evolution of inflation, two elements that are difficult to predict at this stage, although signs of improvement in inflation are being observed.

If these cuts materialize, they could potentially give a boost to the Luxembourg real estate market, which is still struggling. Although professionals are noting a slight improvement in the number of transactions in existing residential real estate, new builds are struggling to find buyers. Projects are being delayed due to a lack of financing, and reservations from private individuals and investors in new developments remain rare.

The economic impact of this upcoming cut will be evaluated shortly, and the schedule for future rate reductions will be determined based on this evolution. The ECB is adopting a cautious approach and avoiding any firm commitments on further cuts. It will likely reduce its rates gradually to maintain a consistent level of monetary restriction.

The borrowing rate is a key factor when acquiring a property via a mortgage. Its drastic increase has paralyzed the real estate market in Luxembourg, causing an unprecedented crisis. We forecast a rate drop of 75 basis points before the end of 2024, which should significantly ease monthly payments for borrowers.

Evolution of Mortgage Interest Rates in Luxembourg in June 2024

aide_logement_luxembourg_2024.jpg

On May 14, 2024, the Luxembourg Chamber of Deputies approved a new stimulus package for housing. This package was developed by the Ministry of Housing and Spatial Planning and the Ministry of Finance through intensive discussions with various representatives of the housing sector. The main objective is to facilitate access to housing and support the construction sector through various short- and medium-term measures.

## Increased eligibility for housing assistance

From now on, more households are eligible for the various forms of assistance provided for renting and purchasing homes. Public investments for the creation of affordable housing are being strengthened. In addition, a series of temporary tax measures − limited to the year 2024 and retroactive to January 1, 2024 − are being implemented by the Ministry of Finance. These measures target buyers, owners, and investors.

## Upcoming initiatives for collaboration in the housing sector

Beyond this initial stimulus package, the government is currently conducting discussions to implement additional measures aimed at strengthening collaboration between the public and private sectors, simplifying administration, and mobilizing private and public land for the creation of affordable housing. The results of these discussions will be communicated in June.

## More housing assistance for more households

"In this difficult situation on the real estate market, affecting more and more households, it was important for us to provide more support to families. We have therefore placed a particular focus on families with children, who suffer especially from the shortage of affordable housing," emphasized Claude Meisch, Minister for Housing and Spatial Planning, during a press conference on May 15, 2024.

## Raised income ceilings for housing assistance

The income ceilings for all individual housing aids are adapted to the evolution of the adjusted standard of living and take into account household composition. Thus, the income ceilings for single individuals increase by an average of 6% and those for households with children by 8% to 25% (depending on the number of children).

## Support for tenants with children

The rent subsidy is increased for households with dependent children. Thus, for each dependent child, the planned portion is raised to 80 euros per child, instead of the previous 40 euros.

## Support for homebuyers

**Homeownership grants:** The income limits for homeownership grants are increased, making 59% of all households theoretically eligible for a homeownership grant.

**Interest subsidy:** The maximum rate of the interest subsidy is increased to 3.5%. This measure helps alleviate the interest burden for real estate buyers and applies to new mortgage loans as well as existing ones, thus helping households in difficulty following an unpredictable rise in interest rates. The income ceilings to qualify for the interest subsidy are also raised.

**State guarantee for homeownership:** In the absence of the base capital required to obtain a mortgage loan from the bank, the State can, under certain conditions, act as a guarantor for the loan. With the stimulus package, the conditions for granting the State guarantee have been revised upwards:

- The ceiling for the maximum borrowing rate of the guaranteed loan is increased from 3% to 6%.

- The maximum rate of the State guarantee relative to the project cost is increased from 30% to 40%.

- The income ceilings applicable to the State guarantee are raised.

## Broadening of eligible buyers for affordable and moderate-cost sales

The eligibility criteria for housing built by public developers (municipalities, Fonds du Logement, SNHBM) intended for affordable or moderate-cost sales have been raised. Thus, the pool of potential buyers for these properties sold (under emphyteutic lease) well below market prices is significantly broadened. In principle, 70% of households are now eligible to purchase affordable housing, and 80% of households for moderate-cost housing.

The Ministry of Housing and Spatial Planning is planning several targeted campaigns promoting the various forms of assistance aimed at private market tenants and homebuyers.

Regarding the tax measures put in place by the stimulus package, the public can find out more information from the Ministry of Finance.

**Maintaining a high level of investment for the creation of affordable housing:** Alongside the measures planned in the stimulus package, the State is providing itself with substantial resources to invest heavily in the creation of affordable housing.

**Extension and strengthening of the off-plan sale program (Vente en l'État Futur d'Achèvement - VEFA):** This measure helps increase the public affordable housing stock and supports developers short on liquidity who are experiencing difficulties selling their housing projects. The Special Fund for Affordable Housing is endowed with an additional multi-year financial envelope of 480 million euros for 2024-2027.

**Increased Allocation for the Special Fund for Affordable Housing:** It is planned to significantly increase the creation of public affordable housing. This will help support access to affordable housing and revive the activity of construction companies. According to the budget voted for 2024, 1.45 billion euros (1,447,654,152 euros) will be invested through the Special Fund for Affordable Housing into the creation of affordable housing (for rent and sale) over the 2024-2027 period. This corresponds to an annual average of more than 360 million euros, doubling the Special Fund's expenditures from 2023, which stood at 184 million euros.

_"The State is investing massively in public housing! This can only be done through good collaboration between the public and private sectors. Through the discussions I have had in recent months with all housing stakeholders, I note that we are all moving together in the same direction"_, noted Claude Meisch, Minister for Housing and Spatial Planning.

## Information for the public

To learn more about the various housing aids for individuals, potential applicants can find information on the granting conditions and check their eligibility for the different aids at www.logement.lu. The staff of the Housing Assistance Department (Service des aides au logement) are available to inform the public at the offices of the Single Point of Contact for Housing Assistance (Guichet unique des aides au logement) located at:

11, rue de Hollerich L 1741 Luxembourg

Hours: Monday to Friday from 8:00 to 12:00 and from 13:30 to 16:00, Thursdays from 8:00 to 17:30 by appointment only.

You can also contact them by email at guichet@ml.etat.lu or by phone at (+352) 8002 10 10, Monday to Friday from 8:00 to 16:00.

New Housing Stimulus Package Approved by the House

new_or_used_real_estate.jpg

_Real estate purchasing demand in Luxembourg has sharply increased since April. At the same time, banks are lending money again, making it possible to envision oneself as a future homeowner in Luxembourg. Buying an existing property and buying a property under construction each have their advantages and disadvantages._

Here are a few points to consider for each option:

## **Buying an existing property**

### Pros:

**Immediate availability:** you can move in quickly after the purchase, which is ideal if you need housing without delay.

**Negotiable price:** you have the opportunity to negotiate the price with the seller, depending on market conditions and the urgency of the sale.

**Visibility:** you can visit the property and get a precise idea of what you are buying, which reduces the risk of unpleasant surprises.

### Cons:

**Need for renovations:** some existing properties may require renovation or repair work, leading to additional costs.

**Limited options:** you might be limited by the characteristics and layout of the existing property, which might not exactly match your needs.

**Hidden costs:** in addition to the purchase price, you may have to pay extra costs such as notary fees, property taxes, and moving expenses.

**Low energy performance:** existing properties often lack good insulation and can be more expensive in terms of energy maintenance.

## **Buying a property under construction**

### Pros:

**Customization:** you have the opportunity to personalize certain aspects of the property's design and finishes according to your preferences.

**Brand new condition**: you benefit from a new property, often equipped with the latest technologies and building standards, which can reduce long-term maintenance costs.

**Warranties**: new builds come with construction warranties, offering you some peace of mind in case of structural issues.

**High energy performance**: new properties are generally equipped with good insulation and benefit from optimal energy performance.

### Cons:

**Wait time:** you will have to wait until construction is completed before you can move in, which can take several months or even more than a year.

**Uncertainty:** plans and renderings may differ from reality, which can lead to disappointment compared to what you expected.

**Risk of delays:** construction projects sometimes face delays due to technical issues, bad weather, or administrative delays, which can prolong the initial waiting period.

**Purchase price:** the purchase price of a property under construction is generally higher than the price of a similar existing property, requiring a greater financial effort from the buyer.

Whether you opt for buying an existing property or a property under construction largely depends on your personal preferences, your financial situation, and your housing needs. Buying an existing property offers the possibility of moving in quickly and benefiting from immediate visibility of what you are buying, but it may require renovations and be limited by available options. On the other hand, buying a property under construction offers the opportunity to customize the property to your taste, but it requires a longer waiting period and carries an increased risk of delays and uncertainties compared to the initial plans. It is therefore important to carefully examine the pros and cons of each option before making a decision.

Buying New or Existing for Your Primary Residence in 2024?

real_estate_price_prediction (1).jpg

**Nextimmo presents its brand-new predictive tool for evaluating the future prices of existing residential real estate, dubbed "Tendances 2024".** As a pioneering player in the real estate sector, the Nextimmo team is committed to using cutting-edge technologies to strengthen market transparency. This innovative tool is designed to forecast price trends for the upcoming quarters.

Founded in response to a sector crisis, this hybrid real estate agency has developed a platform dedicated to promoting properties under mandate as well as offers from its partner agencies. This user-centric platform offers significant advantages to potential buyers by providing crucial information for informed purchasing decisions on the Luxembourg residential real estate market.

**Their team of real estate data experts has developed a tool for analyzing current price trends, enabling short- and medium-term projections of prices per square meter and by municipality.** This tool, a first in Luxembourg, offers a precise comparison of the positioning of properties on the platform relative to other similar listings, thereby helping future buyers evaluate the attractiveness of the properties.

The Luxembourg real estate market, often criticized for its lack of transparency, saw prices skyrocket after the pandemic, contributing to a recent drastic price correction. In response, Nextimmo has leveraged public data available since 2016 to create graphs detailing the evolution of real estate prices in Luxembourg. **These graphs illustrate the rise in prices before their recent adjustment. Furthermore, they have developed an algorithm to forecast prices per square meter by municipality for 2024, where data is sufficient to establish future trends.** Nextimmo will continue to collect data to refine the accuracy of its predictions and will consider integrating artificial intelligence into its future models.

This new tool is now available for existing properties in municipalities where there are enough listings to provide a reliable projection, accessible via the properties for sale on the www.nextimmo.lu platform.

**To consult these indicators, simply go to the Sales section of Nextimmo and scroll down to the bottom of the listing page of your choice. Currently in its beta phase, this tool aims to predict listed and recorded prices over a one-year period.**

New Price Prediction Tool for Existing Residential Real Estate

interest_rate_luxembourg.jpg

_If you are considering buying a property in Luxembourg and are wondering what the current interest rates are, this article will provide you with all the essential information for your future real estate purchase or investment._

After the sharp rise in interest rates at the end of 2022, an initial significant drop was observed at the beginning of this year. Dropping from 4.8% to 3.8%, the prevailing mortgage rate is becoming increasingly attractive. Some banks are even offering rates around 3.5%, provided your application is strong and the property in question has a good energy rating, preferably A or B.

**Choosing between fixed rates, variable rates, and adjustable rates: which is the best choice?**

In Luxembourg, several types of rates are offered for mortgages:

**Fixed rates:** The rate remains constant throughout the term of the loan. It is possible to renegotiate this rate during the loan term, but this may result in paying early repayment penalties to the bank.

**Variable rates:** The rate varies according to financial market fluctuations. This type of rate was very popular in Luxembourg before the sharp increase in interest rates in 2022. Since then, it has become less attractive as it is generally higher than the fixed rate.

**Adjustable rates:** The rate is fixed for a specific period (for example, three years) and then becomes variable for the remainder of the loan term. When the adjustable rate period expires, it is possible to renegotiate the loan and switch to a more advantageous fixed rate, provided that rates have dropped during this time.

Each type of rate has its advantages and disadvantages, and the choice will depend on your personal financial situation, your risk tolerance, and your outlook on interest rate trends. Before making a decision, it is recommended to consult a financial expert to evaluate the various options available and choose the one that best suits your needs.

The ECB forecasts a drop in interest rates by the end of the year, and this trend could continue in the coming years. Consequently, it may be wise to opt for an adjustable rate that is fixed for 3 to 4 years in order to take advantage of future rate drops without penalties.

By working with local brokers, Nextimmo is able to negotiate the best terms for you. Do not hesitate to [contact us](https://nextimmo.lu/contact) for more details.

Evolution of Mortgage Interest Rates in Luxembourg in 2024

location-luxembourg.jpg

The rent cap reform will not see the light of day, but the Ministry of Housing is highlighting "the other important aspects" of the bill. The Government Council approved on Monday, April 15, 2024, the government amendments to the bill modifying the rules on residential leases.

These amendments are now in the legislative process, so that the bill can be examined by the Council of State and voted on by the Chamber of Deputies "very soon".

**Sharing of real estate agency fees**

In the future, real estate agency commission fees will be shared equally - thus 50/50 - between the landlord and the tenant, assures the Ministry of Housing.

**Abolition of the concept of luxury housing**

The concept of "luxury housing," which made it possible to avoid the application of the rent cap (defined by the rule of 5% of the capital invested in the accommodation), will be abolished, notes the government.

**Reduction of the security deposit from 3 to 2 months maximum**

The maximum legal amount of the rental guarantee is reduced from three to two months' rent.

_"The bill introduces a procedure for the return of the rental guarantee, with specific terms, including a penalty in the event of non-compliance with the deadlines set by law when the tenant leaves the accommodation,"_ specifies the Ministry of Housing.

**Limitation of rent increases to 10% every two years**

The annual thirds rule is replaced by a biennial rent limit of 10%, notes the ministry. During each rent adjustment, the rent can therefore not be increased by more than 10%.

It should be noted that a rent supplement for furniture may be requested by the landlord in the case of furnished accommodation.

**Obligation of a written lease and compliance with the legal rent cap**

Every residential lease agreement will obligatorily have to be drawn up in writing in the future, and contain certain mandatory clauses, explains the government.

_"Thus, for example, the statement that the rent requested by the landlord for the rented accommodation respects the legal annual rent cap (5% of the capital invested in the accommodation) will have to be stipulated in every future lease agreement,"_ it illustrates.

**Shared tenancy**

The bill provides specific legal provisions for shared tenancy, _"which are still lacking in the current legislation,"_ explains the government. Between the tenants and the landlord, a _"single shared tenancy agreement"_ is established. In addition, the co-tenants "establish in writing" a co-tenancy pact, in order to formalize the aspects of communal living and the practical modalities of this form of rental.

When a co-tenant wishes to be released from their obligations before the end of the lease, _"they notify the landlord and their co-tenants simultaneously with three months' notice"_. The notification to the landlord is made _"by registered letter"_ with acknowledgment of receipt. This co-tenant _"is required"_, before the expiration of their notice period, to look for a replacement co-tenant.

The other co-tenants or the landlord _"can also propose a replacement candidate"_. Failing to have presented a replacement candidate, the outgoing co-tenant _"must be able to demonstrate having conducted an active and sufficient search"_ in order to find a new co-tenant.

New property rental rules in Luxembourg soon to take effect?

achat_immobilier_2024_luxembourg.png

After a period of freefall in real estate prices in Luxembourg due to the market downturn, a glimmer of hope seems to be appearing on the horizon. The first quarter of 2024 recorded 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 who aspire to finally become homeowners?

First of all, supply remains relatively abundant, thereby offering a wide range of choices for potential buyers. Furthermore, prices have experienced a significant drop, varying between 20% and 30% depending on the municipalities, which makes real estate accessible once again for many buyers. Although mortgage rates are still far from their pre-crisis levels, a downward trend is beginning to emerge, particularly for fixed rates. Moreover, even if you take out a mortgage at a relatively high rate, it is possible to renegotiate it in a few years through mortgage refinancing.

Real estate remains a major issue in the Grand Duchy, and ensuring the construction of new housing in order 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. An increase in demand is therefore to be expected in the coming months, which should help stabilize prices by the end of the year. For tenants planning to stay 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 time is right to search for your future home. When rates drop below 3% (currently, the fixed rate is at 3.5%), prices will start to rise again due to a lack of supply. After hitting rock bottom, real estate prices should experience a recovery, which is a logical consequence of emerging from the crisis, thereby stimulating economic growth.

When the construction sector is down, everything is down! But when the real estate market takes off again, it can be a positive sign for all other economic activities. Let us therefore follow this path toward a prosperous future, in our very own home!

At Nextimmo, we are committed to guiding you through all your property search steps and helping you make your real estate projects a reality.

Real Estate in Luxembourg: Towards Price Stabilization in 2024?

nextimmo_albalux_partners.png

In a context where the real estate market is experiencing significant fluctuations, two innovative players have decided to break with convention by joining forces to facilitate access to housing in Luxembourg. [Nextimmo](https://nextimmo.lu/), the country's first hybrid agency, and [Albalux](https://www.albaluxcredit.lu/FR/Home/Index), a recognized specialist in mortgage brokerage, have formed a strategic alliance aimed at simplifying and optimizing the property purchasing journey for future homeowners.

## A pioneering collaboration for Luxembourg

Founded in 2022, [Nextimmo](https://nextimmo.lu/) quickly emerged as an innovative solution to the challenges of the Luxembourg real estate sector. By adopting a unique business model that promotes the free publication of listings and success-based commission sharing, Nextimmo has managed to convince nearly 100 real estate agencies to join its platform. With over 1,700 regularly updated listings on nextimmo.lu, the company positions itself as a key player for property searches in the country.

[Albalux](https://www.albaluxcredit.lu/FR/Home/Index), on the other hand, is an institution in the world of mortgage brokerage in Luxembourg. Its ability to negotiate advantageous financing offers with partner banks, both Luxembourgish and international, makes it a valuable resource for any buyer looking for the best mortgage.

## A strategic partnership with multiple benefits

This partnership between Nextimmo and Albalux represents a fantastic opportunity for future buyers in Luxembourg. Indeed, it combines Nextimmo's real estate expertise with Albalux's financial know-how, thereby offering an improved user experience and easier access to the Luxembourg real estate market. The integrated credit calculation tool on Nextimmo's listings now allows users to obtain a reliable estimate of their borrowing capacity, a crucial step in the purchasing process.

## Why is this partnership a game-changer?

The benefits of this collaboration are not limited to increased efficiency for potential buyers. They also mark a significant evolution in the way real estate and financial services can work together to meet consumer needs. By pooling their resources and skills, Nextimmo and Albalux demonstrate that a holistic and integrated approach to the real estate market can not only improve the customer experience but also stimulate the real estate sector as a whole.

## Advantages of the Nextimmo and Albalux cooperation for private individuals

The collaboration between Nextimmo and Albalux opens a multitude of doors for private individuals looking to navigate the Luxembourg real estate market. This strategic alliance is not only good news for both companies; above all, it represents a revolution for property buyers and investors. Here are the main advantages of this cooperation for private individuals:

## Simplification of the real estate purchasing process

Buying a property can often seem like an obstacle course, especially for those unfamiliar with administrative and financial procedures. The cooperation between Nextimmo and Albalux significantly simplifies this process. Users can now find their dream property on nextimmo.lu and simultaneously obtain an accurate estimate of their financing capacity thanks to the integrated calculator, thereby facilitating decision-making and accelerating the purchasing process.

Nextimmo and Albalux Join Forces to Facilitate Access to Housing

right-time-to-invest-in-new-real-estate.jpeg

With the recent government announcements introducing new tax incentives for those considering buying a new property in 2024, it seems to be the ideal time to invest. These aids, available for a limited time, offer a unique opportunity for buyers.

Furthermore, financing conditions have never been so attractive, especially for properties with high energy performance. Preferential rates are now accessible, reaching 3.4% for properties with a Class "A" energy passport, thanks to negotiations conducted by Nextimmo's partners. This means substantial savings on the total cost of your mortgage.

In this favorable context, Nextimmo is launching "New-Build Months" ("Les mois du neuf"), an initiative designed to guide you towards the best off-plan (VEFA) buying opportunities. This campaign will allow you to receive directly in your inbox:

• A weekly selection of new real estate developments,
• Detailed explanations of the new government aids,
• Practical guides to facilitate your real estate purchase in Luxembourg,
• Interviews with local developers to explore the future of certain neighborhoods and cities in Luxembourg.

This moment is particularly opportune for investors and future homeowners wishing to take advantage of the benefits of new builds, both financially and in terms of quality of life. New properties offer not only superior energy performance, but also modern designs and extended builder warranties.

The Nextimmo real estate agency invites you to seize this opportunity. Our team is at your disposal to support you in your purchase project, providing you with expert and personalized advice. Whether you are looking for your future primary residence or a rental investment, Nextimmo is your trusted partner for navigating the Luxembourg real estate market.

Don't wait any longer to realize your real estate project. Contact [Nextimmo](https://nextimmo.lu/) today to discover how we can help you make the most of this unique opportunity.

Why It's the Right Time to Invest in New Real Estate?

nextimmo-at-the-heart-of-transparency.jpeg

In a world where trust reigns supreme, Nextimmo Sàrl shines through its commitment to knowing each client perfectly. It is not just a matter of filling out forms; it is the promise of a relationship based on clarity and honesty. Here is how they achieve this.

## A deep dive into the corporate world
At Nextimmo, every corporate client becomes an open book. From its name to its directors, everything is carefully scrutinized. Imagine a world where every document, every signature reveals its story, guaranteeing that behind every transaction lies an undeniable truth.

## Individuals under the microscope
But Nextimmo does not stop there. Every person behind a purchase or rental is known down to the smallest detail. It is not just about knowing who you are, but understanding your background, ensuring that every exchange is as secure as an exchange between long-time friends.

## A mark of professionalism
This quest for authenticity is not a mere formality. It is the backbone of Nextimmo, an assurance that every street corner, every house sold or rented, rests on solid and transparent foundations.

## Ultimately, unwavering trust
This journey into the heart of due diligence is not undertaken alone. Nextimmo invites each client to participate in this adventure of transparency, strengthening a bond of trust that goes beyond mere real estate transactions.

Blog and real estate advices