Luxembourg and Luxembourg City very often top the rankings in terms of real estate prices. The country and its capital are among the most expensive places in Europe to buy or rent a property.
But are they really the most expensive places in Europe? To find out, we relied on the Global Property Guide, a guide that brings together data from Statec and the real estate portal AtHome. The study focuses on three parameters: the purchase price in the center of the cities studied, the rents for one-bedroom homes, and the number of years needed to make a purchase profitable compared to the rent charged.
The second most expensive city centre in Europe
According to data from the Global Property Guide, Luxembourg is the second most expensive city in Europe to buy a property in the city centre. According to the sources used for this study, updated in September 2024, the median price per square metre in the city centre of Luxembourg is 11,332 euros.
Only the city centre of Zurich (Switzerland) is more expensive, with an estimated median price of 17,284 euros. The podium is completed by London (United Kingdom), with an estimated median price of 9,540 euros. Paris comes just behind (9,430 euros), followed by Amsterdam (8,384 euros), Oslo (7,935 euros) and Vienna (7,555 euros).
In the top 10 of the highest rents in Europe
On the other hand, as far as rents are concerned, the Grand Ducal capital is moving away from the podium, since it comes in ninth position in the top 10 of the most expensive cities on the continent.
According to the latest data published in September 2024, with a median rent estimated at 1,600 euros by the Global Property Guide, Luxembourg City ranks ahead of Lisbon (1,500 euros) and behind Copenhagen (1,640 euros).
The podium is made up of London (3,760 euros), Milan (2,500 euros) and Zurich (2,300 euros). The rest of the top includes Paris (2,000 euros), Madrid (1,900 euros), Amsterdam (1,850 euros) and Dublin (1,700 euros).
The highest price/rent ratio in Europe
There is, however, one category in which Luxembourg comes out on top, according to data from the Global Property Guide: the country has the highest purchase-to-rent ratio in Europe. In plain language, “this ratio, calculated by dividing the average price of a home by the annual rent, assesses the value of a property by indicating the number of years needed to recover the investment,” explains the Global Property Guide.
According to the guide, it takes 37 years for a Luxembourg homeowner to make a profit from their purchase through rental income, making it the highest average on the continent. For comparison, it would take 33 years for a Swiss homeowner and 28 years for a Czech or Austrian homeowner to become profitable after a property purchase.
A slight increase in real estate prices in the country
Overall, according to the Global Property Guide, property prices in Luxembourg have seen a slight increase in recent weeks after several months of significant decline.
According to the guide, “in the year leading up to the first quarter of 2024, the average sale price of apartments fell by 8.72% to 7,802 euros, according to Statec data. This is the fifth consecutive quarter with a drop in prices.” Furthermore, “with the adjustment of prices to inflation, the drop is even more significant, reaching 11.59%.”
However, at the end of the first quarter of 2024, “apartment prices increased slightly nationwide, by 1.62% (1.27% with adjustment for inflation).”
