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Real Estate

10 February 2015

Luxembourg Under Construction 

Suffering from a limited housing supply and rocketing prices barely dented by a recent economic slowdown, Luxembourg City has opened up two large swaths of land to home construction.

At the Ban de Gasperich development south of the capital, where the European Commission, PricewaterhouseCoopers and Deloitte are moving into complexes large enough to house their workforces, around 1,000 high-end apartments will be built in an effort to create a holistic work-life environment.

West of the city, in the affluent Belair neighborhood, a total of 100 new homes and 1,050 apartments will be built in two separate developments.

This follows approval by city officials to change the previous urban development plan, which restricted construction to ensure a green belt on the capital’s edge.

The new developments represent a significant expansion of housing stock in a city of just over 100,000 inhabitants. They also reflect the pressure of a constantly growing national workforce in which 165,000 “frontaliers” commute each day from neighboring Belgium, France and Germany.

More non-Luxembourgers than nationals live within the city’s borders – just 31 percent of its population hold Luxembourg passports, including the growing number of dual nationals.

According to the national statistics office, the average price of existing houses in the Grand Duchy grew by 7% to €547,000 over the 12 months, ending September 31, 2014. In and around the capital, the average is €762,400, raising questions about affordability for thos not employed in high-wage sectors.

Even the addition of more than 2,000 new units over the coming years is unlikely to lower such prices, but it might just slow the rate of growth – temporarily.