House prices in Luxembourg have been rising since the second half of 2009, after almost two years of house price falls, with lower interest rates boosting demand.
The average apartment price rose 2,12% during the second quarter, and is 6,73% up on the same quarter last year, at €3,896 per sq. m., according to Observatoire de L’ Habitat. Year-on-year, prices are higher both for existing flats (6,73%) and for apartments under construction (5,27%).
Most mortgage loans in Luxembourg are variable rate, making the housing market sensitive to interest rate changes. As of September 2011, the harmonized long-term interest rate stood at 2,27%, down from 2,59% the previous month, according to the European Central Bank ( ECB).
In Q2 2011, the volume of real estate sales rose by almost 7 000 000 euros, 8,5% up on the previous quarter. Demand for apartments remains strong, thanks to continued economic recovery. The economy is expected to expand by 4% in 2011.
Source: http://www.globalpropertyguide.com/Europe/Luxembourg