The reasons behind the high cost of construction in Luxembourg were the focus of a roundtable discussion organised by the newly formed Federation of Property Developers (FDI).
One of the primary goals of the FDI is to represent the interests of property developers in the country. To this end, the federation is seeking to establish a dialogue with the banking sector, the Order of Architects (OAI), and lawmakers.
The FDI reports that it is already in contact with political parties, the Chamber of Deputies, and government representatives.
While acknowledging that these various stakeholders are receptive to the challenges faced by developers, the federation stressed that openness alone is insufficient. Steve Vermeer, spokesperson for the FDI, described the talks so far as “good” and “regular”. However, he emphasised the need for these discussions to translate into concrete action soon. “Waiting is useless and we have the feeling that it’s getting worse and worse,” Vermeer stated.
A particularly sharp decline in sales has been noted for homes bought off-plan, known as VEFA. The FDI highlighted that while approximately 1,600 new homes have been sold annually over the past three years, over 5,000 new homes are required each year to meet the country’s needs. The federation expressed hope that customer confidence in the market will return.
The FDI has calculated that the shortfall of 3,000 homes per year compared to pre-crisis construction levels results in an estimated economic loss of €1.17 billion annually. According to Vermeer, the high cost of construction is not solely attributable to a lack of VEFA projects. He pointed to a combination of other factors, including rising costs for materials, energy, labour, and financing, as well as an increasing number of regulations and standards. All these elements, Vermeer explained, drive up overall costs and contribute to longer administrative delays.
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