The Luxembourg housing market has entered a pivotal phase of stabilization following the historic correction that defined 2023 and 2024. According to the latest data from STATEC and the Observatoire de l’Habitat, the sharp double-digit declines of the previous years have tapered, giving way to a more balanced, albeit cautious, trading environment in early 2026.
The macroeconomic shift in mid-2022 disrupted the residential market, causing the new-build and resale sectors to diverge. Prices for second-hand apartments fell 12% from the 2022 highs to the 2024 lows. This significant pricing adjustment facilitated deal making that saw transactions fall by 38% in 2023 before rebounding 45% the following year. Pricing remained flat in 2025 while deal count increased again equal to the 2021 highs.
New-construction apartments, on the other hand, followed a different dynamic. Developers were more reluctant to lower prices over this period. As a result, the number of transactions collapsed 68% in 2023 and recovered more slowly compared to the second-hand market. Transactions are roughly half that of the pre-macro shift highs, while prices declined just 4% from peak to trough.
Average pricing for Luxembourg apartments in 2025 was 8,134 €/sqm (€628,124), representing a 2% increase, year-over-year. Second-hand apartments averaged 7,773 €/sqm (+0.9%), while new apartments were 10,179 €/sqm (+4.9%). At the municipality level, second-hand prices were highest in Luxembourg City (10,270 €/sqm), followed by Strassen (10,031 €/sqm) and Bertrange (9,991 €/sqm). New apartment prices were highest in Hesperange (12,805 €/sqm), Bertrange (12,361 €/sqm) and Strassen (12,106 €/sqm). Overall asking prices in Luxembourg City were led by the districts of Belair (14,273 €/sqm), Neudorf (13,601 €/sqm) and Gasperich (12,289 €/sqm).
The return to more familiar transaction levels across the second-hand market highlights an equilibrium between market participants, as buyers take advantage of a price plateau that has held steady since late 2024. With mortgage rates softening under 4.0% and prices decoupled from the relentless appreciation of the previous decade, the Luxembourg market enters 2026 as a more predictable environment for both residents and investors.
