Which cross-border region should you choose for real estate investment?

Investing in real estate is often a strategic decision to grow your capital or generate rental income. In the Greater Region, four cross-border markets stand out: Luxembourg, Belgium, France, and Germany. Each of these regions has unique characteristics that deserve to be analysed based on your budget, investment goals, and potential profitability.

Here is a detailed overview to help you make an informed choice.

Luxembourg: A secure choice, provided you can afford it

Luxembourg is renowned for its economic stability and high rental demand. With a steadily growing population and a dynamic market, the Grand Duchy attracts investors seeking security.

Average prices: Real estate prices in Luxembourg exceed €8,000/m², with peaks in high-demand areas like the capital and its immediate surroundings. While prices experienced a slight -5% decline in 2024, the market remains robust in the long term.

Rental yield: Approximately 3–4%. Although yields may seem low, they are offset by highly attractive capital appreciation due to constant demand and limited supply.

Advantages:

Extremely stable market.
Strong rental demand, ideal for long-term investors.
Strict regulations, minimizing risks.

Disadvantages:

Very high entry prices requiring a substantial budget.
Relatively low rental yields compared to the initial cost.

Belgium: An affordable compromise near the border

The province of Luxembourg in Belgium offers an excellent compromise for investors looking to stay close to the Grand Duchy while benefiting from more affordable prices.

Average prices: Family homes range between €200,000 and €250,000 in border towns. Apartments are significantly cheaper than in Luxembourg.

Rental yield: Around 4–6%, relatively attractive for an investment with moderate entry costs.

Advantages:

Much more affordable prices compared to Luxembourg.
Proximity to the Grand Duchy, appealing to cross-border workers.
Stable rental yields with controlled acquisition costs.

Disadvantages:

Moderate long-term price growth.
Rental yields may be limited outside the most attractive border areas.

France: Unbeatable prices, but risks to watch out for

The Lorraine region, particularly areas close to Luxembourg, attracts investors with its very low prices. This market is particularly suitable for small budgets seeking to maximize rental profitability.

Average prices: In some Lorraine towns, prices start around €1,500/m², making it one of the most accessible options in the cross-border region.

Rental yield: Potentially 6–8%, especially in rural areas or small towns with abundant supply.

Advantages:

Very low purchase prices, perfect for smaller budgets.
High rental yields in certain areas.
Proximity to Luxembourg ensures cross-border rental demand.

Disadvantages:

Uneven rental demand, with potential vacancy risks in some rural areas.
Limited long-term property price growth.
Reselling can be challenging in less dynamic sectors.

Germany: A balance of affordability and quality of life

Germany, particularly the Saarland and Rhineland-Palatinate regions, offers a good compromise between affordable prices, economic stability, and proximity to Luxembourg.

Average prices: Prices average around €1,700/m², remaining very competitive compared to other cross-border markets.

Rental yield: Around 4–5%, providing a good balance between immediate profitability and long-term security.

Advantages:

Reasonable purchase prices.
Stable market with decent rental demand in strategic areas.
High quality of life, attracting both families and cross-border workers.

Disadvantages:

Less dynamic market compared to Luxembourg or Belgium.
Variable rental demand depending on the location, requiring thorough analysis before investing.

Comparison of Yields and Capitalization Potential

Luxembourg

Capitalization history: Impressive growth over 15 years due to high demand and limited supply. Even with a -5% correction in 2024, the market remains highly attractive.
Rental yield: 3–4%, low but offset by capital appreciation.

Belgium

Capitalization history: Moderate growth, especially in border areas. Prices increase steadily over time.
Rental yield: 4–6%, appealing for investors seeking a balance between entry costs and immediate returns.

France

Capitalization history: Historically low prices in Lorraine, with limited growth. Some towns benefit from proximity to Luxembourg.
Rental yield: 6–8%, particularly in rural areas or zones with high cross-border demand.

Germany

Capitalization history: Stable growth of around 2–3% per year. The market offers interesting long-term stability.
Rental yield: 4–5%, a solid compromise between affordability and profitability.

Conclusion: Where to invest?

Luxembourg: Ideal for investors seeking stability and capital appreciation, provided they have a substantial budget.
Belgium: A great option for a balance between affordability and proximity to Luxembourg.
France: Perfect for small budgets with high rental yield potential, but location is key.
Germany: An excellent balance between acquisition costs, yields, and quality of life for a secure long-term investment.

Each cross-border region offers unique opportunities. Before investing, clearly define your objectives: capital appreciation, rental profitability, or financial security. A good investment always begins with a thorough analysis of the market and associated risks.