Claire Aumont our resident property expert from estate agent Monde Avenir answers this month’s hot property question.
The property market seems quite sluggish in Luxembourg with some houses for sale for months. Is this an indication that prices will go down soon or just the way things work here?
Some years ago, a house could be put on the market and sold all in the same week. The fact that now a sale may take longer than 5 working days to go through may give the impression of a sluggish market but the reality lies elsewhere.
We need to dissociate the buy and sale market from the rental one. The latter is suffering from a huge lack of properties on offer. Every agency has a long list of renters waiting to find a new home and sometimes advertising is just not necessary.
However, the buy and sell market has slightly slowed down. Indeed some houses remain on sale for months which may be down to the fact they are over-valued. In addition, many vendors are not waiting on the sale of a property to move on so they are not inclined to negotiate prices as much as we would see elsewhere, and are happy to leave a property on the market for several months until they find a buyer.
Speculations over the bank secrecy lift-off and the increase in VAT all generate a feeling of uncertainty, and generally speaking buyers are definitely more cautious since the international financial crisis of 2008/2009.
Whether it will provoke a reduction in selling prices remains to be seen. With so many investors happy to buy here and with a population increasing so dramatically every year, the huge demand in housing may just help maintain prices at the high levels we see today.
Featured photo: weinstock/pixabay