The Observatory of Housing has just published a report dealing with trends in property prices for the Luxembourg territory, and in particular with regard to building land, during the years 2010-2014. With a few exceptions, a price increase is noticeable in almost all cantons. Here are some key elements from the study.

The major trends

The median prices for the entire Grand Duchy between 2010 and 2014 stand at 54,211 Euros/acre, which represents an annual growth of 3.9% (the median price is preferred to the average price because it allows one to not disproportionately take into account exceptional cases of very high prices). Half of the transactions were therefore carried out at a price higher than 54,211 Euros/acre and the other half at a lower price. To further refine this figure, the Observatory stated that 25% of transactions exceeded 74,860 Euros/acre while 25% were for less than 39,016 Euros/care. Given the number of transactions per year, and the very great local disparities, national figures per year are not very significant. The experts prefer, therefore, to carry out their analysis on the level of the cantons. At this level, the increases in land prices are marked over the last five years.

Marked spacial variations

Only two cantons – Wiltz and Diekirch – are characterised by falling prices of building land. In the first case, the decline is moreover very low at just 0.6%. In all the other cantons, land prices have greatly increased: + 8.2 % annual growth rate for the canton of Mersch, + 7 % for the canton of Esch-sur-Alzette and 5,2 % for the canton of Remich. The least strong increases were observed in the cantons of Echternach (+ 1.8 %) and Redange (+ 1.2 %). The canton of Luxembourg showed an average annual increase of 4.3%.

Five cantons, on the other hand, have land prices that are higher than the national median, some of them much higher such as Luxembourg, with a median price of nearly 80,000 Euros/acre and Esch-sur-Alzette, at 72,466 Euros/acre. The cantons of Clervaux and Wiltz, however, offer prices that hover around 21,500 Euros/acre.

Furthermore, the increases were not regular everywhere. For example, prices rose sharply in Luxembourg during 2013 before experiencing a collapse and a recovery in 2014. By contrast, in the canton of Esch-sur-Alzette they experienced a steady increase during the five year period looked at.

The causes of these disparities

Real estate experts point out that the distance to the employment area of the city of Luxembourg has a marked influence on the price of building land. Land located thirty minutes drive from the capital has prices equivalent to 38% of those for Luxembourg. At one hour's drive away, they are five times lower! The number of transactions follows the same geography: the cantons of Redange, Clervaux, Wiltz and Vianden are also those in which the least transactions are conducted. Moreover, a significant increase in prices in the canton of Esch-sur-Alzette reflects the economic dynamism created by recent real estate projects – such as the establishment of the University on the campus of Belval.

Building land prices are increasing in a continuous and reasonable manner, which is a sign of the health of the real estate sector in Luxembourg. It is therefore always the time to invest!

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