After several years of tension and imbalance, the real estate market is entering a new phase: rebalancing. And with it, one key element returns to the centre of every decision: confidence.
What buyers are really looking for
Today, the criteria for choosing a property have shifted. Energy ratings and ESG factors are no longer secondary considerations — they have become decisive drivers.
A clear split in demand is emerging:
- 60% of buyers are targeting properties rated A to E
- 40% still consider F and G-rated properties
- H and I-rated properties are gradually exiting the market
The message is clear: energy performance is now a non-negotiable filter.
The appeal of “move-in ready”… but not only
The market continues to be dominated by demand for properties in excellent condition:
- 75% of enquiries concern ready-to-live-in homes
- Only 25% target properties requiring renovation
Yet the renovation segment is growing: a new generation of buyers is ready to “roll up their sleeves” and create value.
Worth noting: off-plan purchases (VEFA) remain unattractive, held back by a context perceived as too uncertain.
Different life choices by profile
Expectations vary considerably depending on location.
Urban buyers (solo / urban luxury profile):
- 89% of enquiries are for apartments
- Primarily 1 to 2 bedrooms
- Budgets between €600,000 and €850,000
- Floor areas of 50 to 80 m²
Outside major cities (families):
- A near-equal split: 47% houses / 53% apartments
- Preference for 2 to 3 bedrooms
- Budgets between €375,000 and €600,000
- Floor areas of 80 to 100 m²
A decisive factor: borrowing capacity
Economic reality remains the dominant force. Rising interest rates have caused a drop of approximately 30% in borrowing power.
For the same monthly payment (€3,000 over 30 years, fixed rate), the contrast is striking:
| Date | Accessible budget |
|---|---|
| October 2021 | €850,000 |
| October 2023 | €582,000 |
| January 2026 | €596,000 |
Property purchasing power remains constrained, even as a slight stabilisation begins to emerge.
A key message for sellers
In this environment, properties must be impeccable or properly optimised. Buyers — and banks — examine everything:
- Energy performance certificate (EPC)
- Quality of upkeep
- Kitchen and bathrooms
- ESG score
Today, everything is measured, compared and quantified.
Conclusion
2025 marks a turning point: the market is not collapsing, it is recalibrating. Expectations are shifting, decisions are becoming more rational, and a property’s value depends increasingly on its overall quality.
If you are thinking of selling: now is a good time to reposition your property at the right price. A well-priced, well-presented property sells. An overpriced one stagnates.
If you are thinking of buying: the moment calls for reasoned negotiation. Some sellers have revised their expectations downward. Opportunities exist for well-prepared buyers.
Marion is a certified real estate agent in Luxembourg, specialising in Luxembourg City and the western communes.