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The Real Estate Crisis and Sustainability: a Delicate Balance for Luxembourg

The real estate crisis in Luxembourg has taken on a new dimension, presenting the country with a delicate balance between resolving this crisis and its commitment to sustainability. On September 13th, Tehdi-Edouard BABIGEON (MRICS – Partner & COO of INOWAI) moderated a roundtable discussion on the topic, bringing together experts such as Tom BEILER (Associate Architect at BFF ARCHITECTURE URBANISME), Laurent OLMEDO (CEO of the CREAHAUS Group), Raphaël XIOL (Senior Advisor at ADELAER REAL ESTATE B.V.), and Laurent MOsar (CSV).

The Real Estate Crisis and Its Impacts

The real estate crisis in Luxembourg has significant repercussions for the market. The construction of new buildings has slowed considerably, leading to a substantial increase in rents, particularly outside Luxembourg City. People in search of affordable housing are now forced to explore alternatives. This crisis raises concerns about the future of the Luxembourgish real estate market.

Interest Rate Policy and the Flight of International Investors

At the same time, interest rate policy is impeding the real estate market. International investors, a key driver of the Luxembourgish real estate sector, are increasingly concerned about the country's financial stability. It seems like the next government must take measures to stabilize the market. Constraints on systemic risks create challenges for banks in providing financing, further complicating the situation.

Appeal for Government Measures

In response to this crisis, experts are calling on the government to take decisive action. Proposals include a return to accelerated depreciation, reducing VAT to 3%, halving capital gains tax for a limited period, and increasing tax benefits for debtor loans. These measures aim to revitalize the real estate market and encourage investment.

Sustainability in Luxembourg


Luxembourg is known for its commitment to sustainability, especially in the real estate sector. The country has established strict environmental standards to promote eco-friendly construction. Buildings account for 37% of carbon emissions, making this a crucial area for reducing the nation’s carbon footprint.


The Delicate Balance of Sustainability

This commitment to sustainability comes at a cost. Buildings that meet these environmental standards can be more expensive to construct, affecting the profitability of real estate projects. Increased environmental standards may also reduce the interior space of buildings, affecting the occupants’ quality of life.



Luxembourg stands at a complex crossroads, juggling the real estate crisis and its commitment to sustainability. The current real estate crisis is a significant challenge that needs immediate measures to stabilize the market. Luxembourg must strike a balance between ambitious environmental goals and realistic financial constraints to ensure its long-term viability. Resolving the real estate crisis and promoting sustainability remain crucial priorities for the country.

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