Rtl today – real estate: the new home market in decline in Luxembourg
Buyers are turning more and more to the old when it comes to housing or even investing in Luxembourg. The new home market is logically suffering. Explanations.
Shortage of materials, increase in the price of construction, rising land prices: circumstances have certainly not appreciated the new home market in Luxembourg over the past 12 months. And the most recent data from Habitat Observatory come and confirm it. They report a decrease in the volume of sales of off-plan apartments (Sale in Future State of Completion) of 12% over one year.
A problem that has not escaped anyone according to the CEO of the Nexvia agency, Pierre Clément. “From our discussions with market players, buyers, developers but also banks, there is a drop in interest in new buildings which, for the moment, does not seem to be waning.“, he corroborates in a press release. And according to him, this decline could be confirmed in the coming months.
“It is also necessary to consider that an act is signed, it comes from a reservation contract which is sometimes signed between 6 and 12 months before the act. It is likely that the next quarterly publication will only confirm this drop“he affirms. And for once, it is not the lack of supply that would be the cause. Indeed, according to the Statec, the number of apartments for which a building permit has been issued would have increased by 25.3% in 2021.
The factors that led to this decline are numerous. Romain Aubrée, sales manager at Nexvia, explains that “finding a property remains complicated“and recalls that an off-plan purchase”request 24 months or more to wait before delivery“.”Gives ad prices and possible indexation on construction and conditions that can turn away a lot of buyers“, he observes.
New legal provisions and tax changes introduced in January 2021 also played a role. “The CSSF’s credit allocation conditions have particularly impacted investors, who must now contribute 20% of the price of the property in addition to the acquisition costs. The tax depreciation for off-plan assets, advantageous for investors in Luxembourg, has also been reduced “, explains the Nexvia agency.
But this is not necessarily bad news. Pierre Clément recalls that if in the past “it was common to see projects where more than 60% of the homes were bought by investors“, these changes could ultimately”Roof owner-occupants in off-plan purchase “. In the meantime, real estate prices continue to rise, whether in old or new. Other issues currently emerging …
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