Real Estate - Luxembourg

Luxembourg

The Real Estate market market in Luxembourg is expected to reach a value of US$381.50bn by 2024.
Among the different segments, Residential Real Estate dominates with a projected market volume of US$256.40bn in the same year.
Looking ahead, it is anticipated that the market will experience an annual growth rate of 3.45% between 2024 and 2029 (CAGR 2024-2029), resulting in a market volume of US$451.90bn by 2029.
When compared globally, it is noteworthy that United States is projected to generate the highest value in the Real Estate market market, reaching US$132.0tn in 2024.
Luxembourg's real estate market is experiencing a surge in demand due to its strong economy and attractive tax benefits.

Key regions: United States, China, Japan, Germany, United Kingdom

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Analyst Opinion

The Real Estate market in Luxembourg has been experiencing significant growth in recent years, driven by a combination of customer preferences, market trends, local special circumstances, and underlying macroeconomic factors. Customer preferences in the Luxembourg Real Estate market have been shifting towards modern and sustainable properties. Buyers and tenants are increasingly looking for energy-efficient buildings with smart home technology and eco-friendly features. This preference is driven by a growing awareness of environmental issues and the desire for cost savings in the long run. Additionally, there is a strong demand for properties located in convenient and well-connected areas, such as the city center or close to public transportation. Trends in the market show a steady increase in property prices and rental rates. Luxembourg has a limited supply of available land for new construction, which has led to a shortage of housing units. This scarcity, coupled with high demand from a growing population and influx of expatriates, has resulted in a competitive market. As a result, property prices have been steadily rising, making real estate a lucrative investment opportunity. Furthermore, the rental market has also experienced significant growth, driven by the increasing number of international companies and institutions establishing their presence in Luxembourg. Local special circumstances in Luxembourg have contributed to the development of the Real Estate market. The country's status as a financial hub and its favorable tax regime have attracted a large number of multinational corporations and high-net-worth individuals. This has created a demand for high-end residential and commercial properties, as well as luxury rentals. Additionally, Luxembourg's political stability, high standard of living, and excellent infrastructure have made it an attractive destination for both local and international investors. Underlying macroeconomic factors have also played a role in the growth of the Real Estate market in Luxembourg. The country has a strong and stable economy, with low unemployment rates and high GDP per capita. This has increased purchasing power and consumer confidence, leading to higher demand for real estate. Additionally, low interest rates and favorable mortgage conditions have made it easier for individuals and businesses to invest in property. In conclusion, the Real Estate market in Luxembourg is developing due to customer preferences for modern and sustainable properties, market trends of rising prices and rental rates, local special circumstances such as the country's status as a financial hub, and underlying macroeconomic factors including a strong economy and favorable mortgage conditions. These factors have created a competitive market with high demand for real estate, making it an attractive investment opportunity in Luxembourg.

Methodology

Data coverage:

Figures are based on value of residential and commercial real estate, average real estate value, residential estate transactions and leases.

Modeling approach / Market size:

Market sizes are determined by a combined Top-Down and Bottom-Up approach, based on a specific rationale for each market segment. As a basis for evaluating markets, we use data from international organizations and industry associations. Next we use relevant key market indicators and data from country-specific associations such as GDP, price level index, household wealth, household size, number of renter and owner households, housing consumer spending per capita. This data helps us to estimate the market size for each country individually.

Forecasts:

In our forecasts, we apply diverse forecasting techniques. The selection of forecasting techniques is based on the behavior of the particular market. For example, exponential trend smoothing. The main drivers are GDP per capita, population, number of renter and owner households, price level index, housing consumer spending per capita.

Additional Notes:

The market is updated twice per year in case market dynamics change. The impacts of the Russia-Ukraine war are considered at a country-specific level.