House prices in Luxembourg have been rising since the second half of 2009, after almost two years of house price falls, with lower interest rates boosting demand.
The average apartment price rose 2.12% during the second quarter, and is 6.73% up on the same quarter last year, at €3,896 per square metre (sq. m.)., according to Observatoire de L’ Habitat. Year-on-year, prices are higher both for existing flats (6.73%) and for apartments under construction (5.27%).
House sale prices rose 4.24% (0.68% inflation-adjusted) during the year to end-Q2 2011, according to the Ministere du Logement.
Most mortgage loans in Luxembourg are variable rate, making the housing market sensitive to interest rate changes. As of September 2011, the harmonized long-term interest rate stood at 2.27%, down from 2.59% the previous month, according to the European Central Bank ( ECB).
In Q2 2011, the volume of real estate sales rose by almost €7 million, 8.5% up on the previous quarter. Demand for apartments remains strong, thanks to continued economic recovery. The economy is expected to expand by 4% in 2011.
The average apartment price rose 2.12% during the second quarter, and is 6.73% up on the same quarter last year, at €3,896 per square metre (sq. m.)., according to Observatoire de L’ Habitat. Year-on-year, prices are higher both for existing flats (6.73%) and for apartments under construction (5.27%).
House sale prices rose 4.24% (0.68% inflation-adjusted) during the year to end-Q2 2011, according to the Ministere du Logement.
Most mortgage loans in Luxembourg are variable rate, making the housing market sensitive to interest rate changes. As of September 2011, the harmonized long-term interest rate stood at 2.27%, down from 2.59% the previous month, according to the European Central Bank ( ECB).In Q2 2011, the volume of real estate sales rose by almost €7 million, 8.5% up on the previous quarter. Demand for apartments remains strong, thanks to continued economic recovery. The economy is expected to expand by 4% in 2011.
Analysis of Luxembourg Residential Property Market »
RENTAL YIELDS
Last Updated: Mar 01, 2011
Luxembourg is an expensive city to live in, and nothing much has changed over the past year. An 80 sq. m. apartment in the city centre is likely to cost 500,000 Euros, a pretty price by any standards.
Yields are low, as would be expected in such a high-end city (the classier the city, the lower the yield, usually).
Yields are low, as would be expected in such a high-end city (the classier the city, the lower the yield, usually).
TAXES AND COSTS
Last Updated: Oct 04, 2011
Rental Income: Rental income is taxed at progressive income tax rates ranging from 8% for net annual income exceeding €11,265, to 38% on income above €39,885.
Capital Gains: If the property is held for more than two years, capital gains tax rates are reduced to a maximum of 19.475%.
Inheritance: Inheritance is subject to death duties if the property is obtained from a nonresident. Tax rates vary depending on the relationship between the deceased and the heir, from 2% to 15%.
Inheritance is subject to succession duties if the property is obtained from a resident.
Residents: Residents of Luxembourg are taxed on their worldwide income.
Capital Gains: If the property is held for more than two years, capital gains tax rates are reduced to a maximum of 19.475%.
Inheritance: Inheritance is subject to death duties if the property is obtained from a nonresident. Tax rates vary depending on the relationship between the deceased and the heir, from 2% to 15%.
Inheritance is subject to succession duties if the property is obtained from a resident.
Residents: Residents of Luxembourg are taxed on their worldwide income.
BUYING GUIDE
Last Updated: Apr 02, 2007
Total roundtrip transaction cost, i.e., the cost of buying and selling, is between 11.15% and 15.65% inclusive of registration fees (6% - 10.2%) and estate agent's commission (3% plus 15% VAT).
LANDLORD AND TENANT
Last Updated: Jun 29, 2006
Luxemourg's rental market is strongly pro-tenant.Rent: Rent control limits the amount of returns a landlord can receive. Rent can only be increased every three years.
Tenant Security: If evicted, the tenant is usually awarded generous compensation and more than sufficient time to look for an alternative dwelling.
ECONOMIC GROWTH
Last Updated: Oct 17, 2011
Lux embourg’s robust economic growth continues
Luxembourg has one of the highest, if not the highest, GDP per capita in the world, according to Organization for Economic Cooperation and Development (OECD). Nevetherless, from average GDP growth of 5.2% from 1999 to 2007, the Grand Duchy entered recession in the last quarter of 2008, with GDP falling by 3.6% q-o-q. The economic downturn continued in 2009, with GDP contracting 4%.
In 2010, Luxembourg emerged from recession with economic growth of 3.5%, and a further 4% economic growth is expected in 2011, driven by strong export growth and robust domestic demand.
In 2010, Luxembourg’s unemployment rate was 6.2%, up from 5.8% in 2009 and 4.4% in 2008, according to the IMF. Unemployment is expected to fall to 5.8% by end-2011.
Inflation stood at 3.3% in September 2011, up from 2.3% in 2010 and 0.4% in 2009. The rise is mainly attributed to increased commodity prices, according to the IMF.
The Grand Duchy of Luxembourg is known as the “Green Heart of Europe” because of its location and natural resources. Covered with large woods, it has a beautiful landscape. About the size of Paris Metropolitan Area, it is completely surrounded by Belgium, Germany and France.
Notwithstanding its small size, Luxembourg has played a key role in the formation of numerous organizations - the European Union, NATO, OECD, the United Nations, Benelux, and the Western European Union. The Grand Duchy joined the euro currency area in 1999.
Luxembourg is the seat of EUROSTAT, European Court of Justice, European Court of Auditors, the European Investment Bank and other vital EU organs.
In 2010, Luxembourg emerged from recession with economic growth of 3.5%, and a further 4% economic growth is expected in 2011, driven by strong export growth and robust domestic demand.
In 2010, Luxembourg’s unemployment rate was 6.2%, up from 5.8% in 2009 and 4.4% in 2008, according to the IMF. Unemployment is expected to fall to 5.8% by end-2011.
Inflation stood at 3.3% in September 2011, up from 2.3% in 2010 and 0.4% in 2009. The rise is mainly attributed to increased commodity prices, according to the IMF.
The Grand Duchy of Luxembourg is known as the “Green Heart of Europe” because of its location and natural resources. Covered with large woods, it has a beautiful landscape. About the size of Paris Metropolitan Area, it is completely surrounded by Belgium, Germany and France.
Notwithstanding its small size, Luxembourg has played a key role in the formation of numerous organizations - the European Union, NATO, OECD, the United Nations, Benelux, and the Western European Union. The Grand Duchy joined the euro currency area in 1999.
Luxembourg is the seat of EUROSTAT, European Court of Justice, European Court of Auditors, the European Investment Bank and other vital EU organs.
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