Property : Renting while looking for the winning purchase
Property Renting while looking for the winning purchase
In Luxembourg, bricks and mortar are worth their weight in gold. So should we rent or take the leap of faith, and invest and… buy? As one needs to spend on average 1,359 euros a month to rent an apartment in the territory of the Grand Duchy, purchasing is still a safe bet. At 5,734 euros/m2, one would be mistaken to deprive oneself of the opportunity. An overview of the options.
or old apartments, new or old houses
, it’s the same difference. Prices explode, or they soar. In order to buy or rent an apartment or a house, one still has to raid the piggy bank either way. The Observatoire de l’habitat notes a constant increase in Luxembourg property prices
: in 2015, one had to spend 1,618 euros a month for an 89 m2 apartment. This is now 7% more. As for a medium sized house, we are talking about the same kind of situation. Rental price: 3,651 euros per month. And now: 7% more!
For those who prefer to buy, they will find that the average sale price for houses has increased by 7.7%. A 185 m2 property sells at approximately 719,500 euros (or 3,884 euros/m2). In Luxembourg-Ville, the average house price has experienced a fall of 1,4%, but the price of an apartment has seen an increase of 7.2%. Buying a house or an apartment therefore remains an excellent investment.
Renting devours the budget
Another fundamental trend, whose influence is not inconsiderable for the property rental and sale market: the arrival of new residents. This population with a strong purchasing power has dynamised the rental sector. Some prefer to talk in terms of “optimisation of the rental market”…
In parallel with this, some Luxembourgers are moving out to the peripheral areas or into neighbouring countries because they have modest incomes: one now needs to spend over half one’s budget on accommodation.
However, while the prices posted by estate agents over the last six months are still on the increase, it is the properties with more than three bedrooms that are affected. These have increased by +2% on average. The prices of smaller properties are levelling off. Older houses, regardless of size, are going the same way: their average rental is 2,334 euros a month. Three-bedroom houses and larger remain very much in demand, with prices up 5%.
A constant factor is that the State will not allow the less well-off to go by the board. It offers, amongst other things, financing of a rental guarantee (solvency or deposit) that is required by the landlord. Not forgetting a monthly subsidy of up to 300 euros, granted by the housing ministry to the most disadvantaged households…
Purchasing in Luxembourg to bet on the future
Clearly, older property is still a little less pricy than new: 4,636 euros/m² for an old apartment; 5,859 euros/m² for a new one, or approximately 3.5% more expensive compared to the first quarter of 2016 and 7.9% more compared to the second quarter of 2015. For those who feel like investing, purchasing property turns out to be the best solution. It is still the case that in Luxembourg, the average budget for finding one’s dream new apartment is 495,825 euros (all surface areas taken together).
Fortunately, first time buyers, as is the case for others incidentally, can count on State assistance. A helping hand, depending on context, situation and incomes. For the purchase of a new residential property, one can always try the purchasing or saving allowance. Or one can ask the State to stand guarantor for one’s property loan. And why neglect the credit interest subsidies or grants? Finally, the support relating to energy performance is of interest. Construction has not been left behind in this respect. One should just ask. A look at the website http://www.guichet.public.lu/citoyens/fr/logement/index.html
is strongly recommended to find your bearings. As for tax benefits, these are also available! You should go into this with your eyes wide open.
Emilie Di Vincenzo
Other news : Housing prices in Luxembourg