Market overview
Demand for housing in Luxembourg remains high and the market is booming, but the supply of new developments still fails to meet the demand, keeping prices high and making access to property more difficult.
The lack of constructible land will also keep prices under upward pressure for the foreseeable future.
The lack of constructible land will also keep prices under upward pressure for the foreseeable future.
Summary dashboard
GDP and disposable income
In 2019 the GDP per capita amounted to € 79,237 per capita in Luxembourg. This represents more than twice the purchasing power in the Eurozone, € 31,900. The Grand Duchy of Luxemburg's GDP per capita is one of the highest in the world.
(Un)employment
In 2019 the unemployment rate in Luxembourg averaged 5.8%, which is lower than the EU average of 6.4%
Unemployment rate in 2019 (% of labour force aged 15-64 years)
Unemployment rate in 2019 (% of labour force aged 15-64 years)
Population
With 626,108 inhabitants on 1st January 2020, of which 49.68% are women and 50.32% are men, Luxembourg is growing steadily, at a pace of approx. 2% per year since the beginning of the century. The median age in the country is 39.7 years.
According to figures provided by the National Institute of Statistics and Economic Studies of the Grand Duchy of Luxembourg (STATEC), the resident population has increased by more than 300,000 people over the last 30 years (in 1988, the total population was 372,000).
This increase is mainly due to immigration. According to data from Statec, the proportion of foreigners in the total population was 47.48% as of 1st January 2020. Portugal comes first with 33.5%, followed by France with 15.9% and Italy with 7.62%, then Belgium with 7.01%, Germany with 4.56%, Great Britain with 2.06% and the Netherlands with 1.49%
According to figures provided by the National Institute of Statistics and Economic Studies of the Grand Duchy of Luxembourg (STATEC), the resident population has increased by more than 300,000 people over the last 30 years (in 1988, the total population was 372,000).
This increase is mainly due to immigration. According to data from Statec, the proportion of foreigners in the total population was 47.48% as of 1st January 2020. Portugal comes first with 33.5%, followed by France with 15.9% and Italy with 7.62%, then Belgium with 7.01%, Germany with 4.56%, Great Britain with 2.06% and the Netherlands with 1.49%
Housing market
Housing stock.
In 2020 there were a total of 265,000 households in the Grand Duchy for 146,700 inhabited buildings according to Statec. Whilst the number of new dwellings delivered each year grows, the growth is still not large enough to accommodate all new households, thus putting upward pressure on prices. The current housing stock in the Grand Duchy counts 49.7% single-family houses and 50.3% apartments.
In 2020 there were a total of 265,000 households in the Grand Duchy for 146,700 inhabited buildings according to Statec. Whilst the number of new dwellings delivered each year grows, the growth is still not large enough to accommodate all new households, thus putting upward pressure on prices. The current housing stock in the Grand Duchy counts 49.7% single-family houses and 50.3% apartments.
Housing stock - 25% was built after 2000
In spite of the recent increase in construction of new units, the need for housing still exceeds the number of apartments delivered. The need for new housing units is calculated at approx. 6,500 new units on average per year.
Pricing and yield
Prices are rising rapidly as a result of the lack of constructible land.
Evolution of registered prices per sq.m. in a selection of municipalities (€ per sq.m.)
Evolution of registered prices per sq.m. in a selection of municipalities (€ per sq.m.)
Current prime yields are around 3% and apply mainly to the City of Luxembourg. Many prime residential districts in Luxembourg City saw yields compressing below 3% for rather limited volumes, especially in established neighbourhoods such as Limpertsberg, Belair and the City Centre.
