In 2025, the Luxembourg real estate market shows encouraging signs for buyers, thanks to several positive developments:
- Residential Market: Towards a Gradual Recovery
After a challenging period, the housing market is slowly recovering. Prices are stabilising, financing conditions are improving, and public support measures have been extended, restoring buyer confidence. - Price Stabilization
Real estate prices, which had fallen in 2024, stabilised at the beginning of 2025. This allows buyers to plan and commit with greater certainty. - Decline in Interest Rates
At the end of the year, long-term fixed rates are stabilising around 3.95%, according to the www.credihome.lu barometer. Variable rates and very short-term fixed rates have even decreased in recent months, thanks to decisions by the European Central Bank. Some profiles can now benefit from rates below 2.9%, making credit more accessible. - Extension of Tax Measures
The Luxembourg government has renewed the “Bëllegen Akt”, which allows a reduction in notary fees of up to €40,000 per person. This measure makes property purchases easier, especially for first-time buyers.
The Current State of the Luxembourg Real Estate Market
Luxembourg’s attractiveness continues to draw new residents, attracted by economic opportunities and the country’s stability. However, urban planning constraints combined with the scarcity of buildable land significantly limit new construction.
Despite record market activity, the persistent shortage of properties maintains price pressure and intensifies competition among buyers, even outside city centers.
Price levels remain among the highest in Europe. In Q2 2025, the average price of an apartment can reach €7,967/m², an increase of 4.7% year-on-year. New apartments average €10,511/m² (source: Prix de vente – Logement.lu – Ministère du Logement – Luxembourg).
To address this tension, public authorities are deploying various strategies: tax incentives for first-time buyers, affordable housing programs, and faster building permits. However, regulation alone is not always enough to absorb demand. Buyers must adapt to increasingly demanding conditions.
Challenges and Opportunities for Buyers in 2025
In 2025, property buyers in Luxembourg face a series of challenges, but also interesting opportunities.
Key Difficulties
Among the main obstacles to buying property is the decline in purchasing power. This is due to the cumulative price increases in recent years and interest rates that, while stabilising, remain relatively high.
Housing supply remains limited: there are more people looking to buy than properties available. This is partly due to a slow construction pace and the fact that some land is not being released to the market.
As for interest rates, the trend is relatively stable for long-term loans. In September 2025, fixed rates are around 3.72% for a 10-year loan and 3.97% for a 30-year loan. Variable rates, however, are falling and can drop to as low as 2.90% for the best profiles (source: The best financing for you – credihome).
Another major challenge concerns the energy efficiency class of properties. Requirements for energy performance are becoming increasingly strict, which can reduce the attractiveness of older properties that are poorly insulated or require costly renovations. Buyers must pay close attention to this factor, as it influences not only future costs (heating, renovation) but also resale value, access to certain subsidies, and financing conditions from banks.
Opportunities to Seize
Despite these constraints, the market offers opportunities. Prices have stabilised after a decline between 2022 and 2024, which may represent a window of opportunity for investment. The return of buyers is supported by the extension of certain tax incentives. The most savvy buyers take advantage of this period to refine their project: selecting properties with better energy performance or spaces adapted to new lifestyles (remote work, flexibility).
In addition, analysing price differences between neighborhoods or regions, betting on innovative new developments, and carefully preparing financing can help optimise the purchase and seize the best opportunities. In this context, the ability to adapt criteria, act quickly on good deals, and negotiate effectively strengthens the chances of success.
Tip: Specialised players like credihome offer support to compare offers and optimise financing for a property purchase in Luxembourg.
What Financing Solutions Are Available to Buy Property in Luxembourg in 2025?
Although interest rates have fallen compared to 2023, they remain above historical levels, with repayment periods generally ranging from 20 to 30 years. In September 2025, average rates are around 3.72% for 10 years and vary between 3.71% and 4.57% for 30-year fixed-rate loans (source: The best financing for you – credihome).
First-time buyers can still benefit from 100% financing, but a personal contribution of 10% to 20% is often required.
Numerous public schemes make homeownership easier. The “Bëllegen Akt” allows a reduction in notary fees of up to €40,000 per person (€80,000 for a couple), provided the property is occupied as a primary residence for at least two years.
Buyers can also benefit from homeownership bonuses ranging from €500 to €10,000, with higher amounts for certain properties such as semi-detached houses or condominiums. Energy renovation subsidies like Klimabonus can reach up to €60,000, encouraging buyers to prioritise properties or works that improve energy performance.
Other measures complement this system: interest subsidies to reduce mortgage rates, a home savings bonus of up to €5,000 over ten years, and a state guarantee to strengthen financing applications for certain households.
Broker or Bank: Which Is the Best Option for Your Mortgage in 2025?
Go directly through a bank or use a broker? In 2025, both options offer distinct advantages for financing a property purchase. The bank guarantees a direct relationship and offers standardised, reliable products.
The broker, on the other hand, supports the buyer throughout the entire process: analysing the profile, objectively comparing market offers, negotiating conditions… Using a broker also saves considerable time, especially for complex cases. This service is particularly suited for those who want to maximise their chances and obtain personalised offers.
| Advantages | Disadvantages | |
| Bank | Direct relationship Limited fees | Less choice Limited negotiation |
| Broker | Guidance Tailored offers Limited negotiation | Possible fees Depends on the reliability of the broker |
In 2025, the Luxembourg real estate market remains demanding. Successful purchasing requires careful preparation, constant monitoring, and the ability to seize the right opportunities. For those ready to adapt and anticipate sector developments, real prospects remain, particularly through new-built dynamics or financing innovations. Between vigilance and opportunism, the context offers opportunities—provided you are well-informed and well-supported.
