Luxembourg Housing Prices Increase by 9.6% in 2022

The national statistics institute, STATEC, has reported that housing prices (apartments and houses combined) in Luxembourg increased by 9.6% in 2022 compared to the previous year.

This represents a lower growth rate than in previous years: the average annual increase was 13.9% in 2021, 14.5% in 2020 and 10.1% in 2019.

Between the fourth quarters of 2021 and 2022, this increase stood at 5.6% - a "clear deceleration" compared to previous years, noted STATEC. A lower annual change has not been seen since the second quarter of 2018.

Between the third and fourth quarters of 2022, the price of old housing dropped by 1.9%, whilst that of existing houses fell by 2.3%. Similarly, the price of existing apartments dropped by 1.4%; that of apartments under construction fell by just 0.3%.

With 1,269 apartment sales, the number of transactions was down 30.4% in the fourth quarter of 2022 compared to the same period in 2021. This was also significantly lower than the average for the pre-pandemic years. The financial volume corresponding to these transactions (just over €843 million in the fourth quarter of 2022) fell in similar proportions (down 32.5% compared to the fourth quarter of 2021).

Similarly, STATEC noted a sharp decline in activity in the house sales segment (consisting mainly of old houses) in the fourth quarter of 2022: the number of sales fell by 25.4% compared to the fourth quarter of 2021. Activity was also at a significantly lower level than that of the years preceding the COVID-19 health crisis. The financial volume associated with these transactions fell in the same proportions (down 25.8% compared to the fourth quarter of 2021), which also reflected a stabilisation in the sale prices of houses, noted STATEC.

Activity on the market for the sale of building land also slowed sharply at the end of 2022: down 29% compared to the fourth quarter of 2021. With 429 transactions relating to building land in the fourth quarter of 2022, activity was at a much lower level than in the pre-pandemic years. However, the fall in the financial volume associated with these transactions was less marked: down 4.9% between the fourth quarters of 2021 and 2022.

On the other hand, rents on new leases started to rise at the end of 2022. Advertised rents for apartments rose by 2.1% between the third and fourth quarters of 2022 and by 8% over one year. Similarly, rents on houses increased by 4.8% over one quarter and by 6.9% over one year.