Buying a property is not something to be improvised: whether you are a first-time buyer or already experienced, you must systematically identify market trends before you start. Because even if you have already become the owner of your main residence 10 or 20 years ago – and you think you are sufficiently experienced, the practices change over the years. When you consult the real estate announcements, you must be able to quickly establish if the property in question is offered at the right price and if it is a great opportunity. To do this, here are some tools that will help you to better understand the market in Luxembourg, for each type of accommodation!
Price increases: which properties are most affected?
For several years, we have been talking about the rise in property prices. But exactly how does it manifest itself? It should be noted that it mainly affects older apartments, whose average rate has increased by 8.5% between 2016 and “2017. More generally, old real estate is more expensive, since even the price per square metre for a house has increased by 6.8% over this period.
Faced with this 7.5% increase (on average) in old real estate, new real estate shows a more moderate growth, which has not exceeded 3.8% year-on-year.
In which regions is the market more sensitive?
To properly analyse the market and position yourself on the various properties that interest you, you cannot simply distinguish between new and old. Indeed, from one region to another, prices do not evolve in the same way.
While the increase remains measured in the already densely populated central regions (2.2% in the centre-north, 1.5% in the centre-south), it becomes slightly larger in the east of the territory (4%). But the most attractive regions in which increases in purchase and rental prices can be anticipated are the north and especially the west, which show the highest increases over an identical period (up to 4.5%).
Although it is the least populated sector in Luxembourg, it is experiencing significant demographic growth. Until then, local prices were much lower than those found elsewhere in the country, but they now tend to flirt with the national average.
“The most attractive regions, in which it is easy to fear an increase in prices for purchases and rentals, are the north and especially the west.”
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Is the neighbourhood you are looking for in the making?
If you wish to move into a district like Merl in Luxembourg City, be aware that these residential and green areas, well served by public transport and close to all amenities, logically attract all Luxembourgers. While the prized districts logically imply higher prices then comparable properties in less sought-after environments, it should not be forgotten that there are also areas in the making.
This is the case, for example, in the Gasperich in the district south of Luxembourg City. With the arrival of a shopping centre and a school campus, the real estate offer will diversify – and prices are expected to rise at high speed. Indeed, more and more people will want to buy here, which will contribute to the creation of a certain tension in the market – as can be observed in all developing neighbourhoods.
How to put a real estate property in perspective and analyse it in its context?
As you have understood, it is not enough to inspect the inside of the house (or apartment) with a fine-tooth comb to ensure that the price corresponds to the real value of the property. On the other hand, to make a successful purchase, the future owner must have a better knowledge of the current real estate market, national, regional and even local trends (at the neighbourhood level).
“Choose to be accompanied by a real estate agency, which will guide you in your project.”
Since it is not always easy to take a neutral and informed look at all these complex criteria, before your purchase, choose to be accompanied by a real estate agency, who will guide you in your project.
