According to the latest reports, published on Thursday, activity continued to decline in the Luxembourg real estate market at the end of 2025. This followed the trend which began in the third quarter, following the withdrawal of the housing package. However, the figures remain striking: sales of new-build flats fell from 326 to 149 between the third and fourth quarters of 2025.
This confirms the “fragility of the sector,” said Liser researcher Julien Licheron. It underlines the predictions made by developers at the Chamber of Real Estate last year. Existing properties, however, are displaying resilience, with activity levels nearing those from before the crisis, despite a decrease in the final quarter.
The obstacles are clear. Interest rates are still high, prices increased slightly from the end of 2024 to the end of 2025 (+0.1%, across all segments). Prices rose by 2% for new-builds, explained by the windfall effect caused by government aid. This also accounts for the dramatic drop in activity by the end of the year as the support was withdrawn (-62.4%).
The average price of a square metre in a new flat is still over 10,000 euros, while the same price for older properties is roughly €7.700. That said, prices vary significantly depending on location and whether the property is in close proximity to the capital, as well as the property’s size.
Another observation that cannot be ignored is the increase in rents compared to the previous year (+3%). This represents a slight acceleration compared to what was observed in the previous quarter, but remains very close to the inflation rate measured by the National Consumer Price Index over the same period (+2.9%).
The figures presented here compare prices and rents from 2024 to 2025, as there is no data included for 2026 so far. The market situation has obviously changed over the last quarter, and only one indicator can give an idea of where advertised prices and rents currently stand: the figures from real estate listing platforms.
It is however crucial to distinguish between advertised prices and selling prices. The former doesn’t account for potential negotiations and therefore the price fluctuations that can occur once a deal is finalised.
