As a global real estate company, Engel & Völkers proudly serves communities in more than 30 countries. From here in the Americas, through Europe and Asia, and down to Africa, Engel & Völkers advisors serve their communities not only as local market experts but also as global advisors with an understanding of the real estate market on a global scale. In part, this month Engel & Völkers has gathered some information to share with you on the market in the world’s only grand duchy, Luxembourg.
Luxembourg, officially the Grand Duchy of Luxembourg, is a landlocked country in Western Europe. It is bordered by Belgium to the west and north, Germany to the east, and France to the south. Its capital, Luxembourg City, is one of the four official capitals of the European Union and home to Engel & Völkers Luxembourg. Its culture, people, and languages are highly intertwined with its neighbors, making it essentially a mixture of French and German cultures, as evident by the nation’s three official languages: French, German, and the national language of Luxembourgish.
“Luxembourg’s important multicultural demographics are due to an exceptionally high quality of life, a very strong economy, and the geographic proximity to Belgium, France, and Germany. A high percentage of inhabitants prefer to buy a property rather than renting.”Philipp Niemann
Managing Director of Engel & Völkers Luxembourg
Luxembourg Real Estate Market
Homeownership levels in Luxembourg are high; more than two-thirds of residents own their property, although around half of foreigners initially rent in Luxembourg. According to the Eurostat report, 86.1% of Luxembourg nationals aged 20 to 64 live in properties they own. Ownership was however still the highest among the 55-64 year age group, where 9 out of 10 nationals owned their own homes. And in terms of foreign national homeownership, Luxembourg is well above the EU average of 30% with 56.6% of foreign nationals living in privately owned real estate.
The most sought-after districts and neighborhoods in Luxembourg
Limpertsberg is the capital’s most expensive and sought-after neighborhood filled with mansions, beautiful townhouses, and modern buildings. It is the preferred address of established Luxembourg families who have lived here for generations. Most residents are Luxembourgish or French. Limpertsberg is evolving into a vibrant blend of historic tradition and hip chic.
The neighborhood known as Belair boasts a mix of modern properties and splendid townhouses, some dating back to the “Belle Epoque” era in the late 1800s, a period characterized by peace, economic prosperity, colonial expansion, and technological, scientific, and cultural innovations for France. Despite its multicultural atmosphere, Belair nevertheless retains a very “Luxembourgish” flair, appealing to couples, families, and young professionals alike.
Kirchberg is a small and traditional neighborhood, yet is also undergoing rapid development and regeneration. Due to its central location in the banking district and European Quarter and its proximity to the airport, it’s a very popular neighborhood for international buyers, most commonly bankers, business people, and European civil servants.
The average price in the top segment
The average price for a property depends very much on its location and views. In Luxembourg City, prices per square meter for properties in the top market segment range between $15,300 and $17,600 USD. In some cases, prices can reach as much as 22,000 euros ($26,000 USD) per square meter. This translates to an average price starting around $3.5 million USD for homes in the top segment of this historic small city.
Trends and developments in the Luxembourg market
Increased demand for work from home space
Many Luxembourgians are now working from home and with the possibility of this continuing for an extended amount of time, they are now seeking extra room or space in their homes for an office or dedicated work from home space.
Increased demand for outdoor space
Buyers are focusing more on outdoor space, and less on location. For those that don’t want to move out of the city center, this comes in the form of a desire for a garden and/or terrace in the homes.
Greater interest in moving away from the city center
As a large percentage of those who work in Luxembourg commute cross borders, and as work from home patterns continue, people are beginning to look more for properties further away from Luxembourg City, as this provides more value for their money and the commute time is no longer of high importance.
Pre-pandemic, an analysis carried out by the Luxembourg Institute of Socio-Economic Research (LISER) examined trends amongst Luxembourg’s cross-border workers and the increasing amount of them that were relocating to France, Germany, or Belgium while continuing to work in the Grand Duchy.
The study revealed the two main age brackets of Luxembourg employees making the decision to live over the border are under 30 years old (38%) and 30-39 years old (40%). Buying power, children’s education, and cultural difficulties such as language barriers were found to be the main reasons Luxembourg workers were choosing to live in a bordering country. This trend has now only been amplified with the environment coming out of the pandemic and the global interest in moving away from city centers.
Engel & Völkers Luxembourg
The Engel & Völkers Luxembourg shop is located right in the city center of Luxembourg. Business continues to rebound from the pandemic with a collection of high-end villas, family-friendly estates, and stunning apartments for sale. This includes an exclusive, stunning penthouse with over 3,864 square feet of living space, a massive terrace, breathtaking views across the city and the Petrusse Valley, only half a mile from Boulevard Royal and the city center. The asking price is approximately $7 million USD.
For further information about the property market in Luxembourg and/or referrals please contact:
Engel & Völkers Luxembourg
Phone +352 28 26 17 27