How much have construction costs risen in Luxembourg?
According to Eurostat, the construction cost index for new residential buildings climbed from 84.5 in 2015 to 130.6 in 2025 (2021 = 100), a rise of about 54.6% over ten years. Over the same period, the EU average rose 48.2%. Luxembourg builds more expensively, and faster, than its neighbours.
The increase was not linear. Moderate between 2015 and 2020, it accelerated from 2021: the index went from 100 in 2021 to 114.1 in 2022, then 126 in 2023. Since then the pace has slowed (128.5 in 2024, 130.6 in 2025), but costs remain high. STATEC confirms the trend at home: residential construction prices rose again in 2025 (+2.0% year on year), across every trade.
These figures measure the cost to build: materials, energy, labour, technical and energy standards. The key point: when building is expensive, new homes cannot be delivered cheaply. That cost acts as a floor under new-build prices and, by comparison, supports the value of older homes.
New or old: what prices per m² say today
The Housing Observatory figures (notarial deeds, July 2024 to June 2025) are unambiguous: a new apartment costs markedly more than an equivalent existing one.
| Area | Existing (€/m²) | New / VEFA (€/m²) |
|---|---|---|
| Luxembourg (country) | 7,800 | 10,028 |
| Canton of Luxembourg | 9,764 | 11,608 |
| Canton of Esch (South) | 6,869 | 8,573 |
| Capellen-Mersch | 7,556 | 8,616 |
| East | 6,803 | 8,580 |
| North | 6,062 | 7,559 |
Source: Housing Observatory / STATEC, average prices per m² (notarial deeds), July 2024 to June 2025.
The Observatory states it plainly: a new apartment is 20 to 32% more expensive than an existing one of comparable size. And the gap is unlikely to close, since construction costs keep pushing new-build upward.
Why high construction costs make older homes more attractive
1. Replacement cost supports the old. If rebuilding new costs more than 10,000 €/m², an equivalent existing home at 7,800 €/m² becomes mechanically attractive. As long as building stays expensive, older homes keep a logical discount for buyers and a floor of value that reassures sellers.
2. Lower entry price and immediate availability. Existing homes sell at a lower price per m² and are available now, with no 1-to-3-year wait for a VEFA build to finish. For a household already paying rent, that delay has a real cost.
3. Location. Older homes tend to occupy the best locations (town centres, established communes, near stations and shops), whereas new-build is often constructed on the outskirts, where land is available.
4. The price gap funds the renovation. The difference between new and old often amounts to a full renovation budget, energy work included. Buying old and renovating can deliver a high-performance, well-located home for a lower total cost than the equivalent new-build.
5. The market is already voting for old. In Q2 2025, sales of existing apartments hit an all-time record (1,575 sales, +72.9% year on year), while new-build (VEFA) stayed at half its pre-crisis level. The Observatory itself points to the price gap with existing homes as a likely reason for the weakness of new-build.
New or old: the full comparison
| Criterion | New (VEFA) | Existing |
|---|---|---|
| Price per m² | Higher (20 to 32% more) | More affordable |
| Availability | 1 to 3 years (off-plan) | Immediate |
| Energy performance | Class A, recent standards | Variable, to check (EPC) |
| Renovation needed | None in the short term | Possible (refresh to full renovation) |
| Guarantees | 10-year, 2-year, completion | No builder guarantee |
| Tax and costs | 3% housing VAT (tax relief capped at 50,000 €); registration duty on the land share only | 7% registration and transcription duty on the full price, reduced by the Bëllegen Akt tax credit (up to 40,000 €/person) |
| Typical location | Often on the outskirts | Often central, established communes |
| Charges and upkeep | Low at first | To anticipate depending on condition |
Tax figures are indicative and should be checked for your situation (see sources and disclaimer at the foot of the page).
And in the south (Petange, Esch, the former mining basin)?
In the canton of Esch-sur-Alzette, which covers Petange, Esch, Differdange, Dudelange, Sanem, Schifflange, Kayl, Mondercange and Bettembourg, existing homes sell on average for around 6,869 €/m², against 8,573 €/m² for new-build (Housing Observatory, July 2024 to June 2025). The gap reaches about 1,700 €/m², roughly 25%.
Our view from the field. On an 80 m² apartment, that gap is close to 136,000 €: enough to fund a full renovation, energy work included, while still coming out ahead of new-build. In the south, older homes are also often better located (near stations, town centres and the border) than new developments built on the outskirts. The southern basin remains the best value-for-access ratio in the country, 30 to 45 minutes from the capital.
If you are buying
Think in total cost (price + works + energy + fees), not just price per m². With an older home, get the renovation costed and read the energy performance certificate (EPC) before making an offer: a poor rating is a negotiating lever. With new-build, check the real delivery timeline and the developer's track record.
If you are selling
Good news: the high cost of new-build supports the value of your existing home. But supported does not mean overpriced. The 2025 market rewards homes at the right price (hence the record sales of existing apartments) and punishes overpricing with months of no viewings. A renovated, energy-decent home sells fast; a home needing work must be priced accordingly. The right asking price is what separates a sale in weeks from a property that stalls on the market.
FAQ
Is new-build really more expensive than older property in Luxembourg?
Yes. According to the Housing Observatory, a new apartment is 20 to 32% more expensive than an equivalent existing one. Nationally, new-build is around 10,028 €/m² against 7,800 €/m² for existing homes (notarial deeds, July 2024 to June 2025).
Why have construction costs risen so much?
The Eurostat index rose about 54.6% between 2015 and 2025 in Luxembourg, driven by the price of materials, energy and labour and by tighter standards. The acceleration was sharpest between 2021 and 2023.
Should you buy new or old in 2026?
It depends on your budget, the location you want and your tolerance for works. For many buyers, a well-located older home, then renovated, offers the best total cost. New-build is justified by zero works, energy performance and builder guarantees.
Does a poor energy rating lower the price of an older home?
Yes. A weak energy class (F, G, H) weighs on price and complicates financing. An energy renovation restores the value and appeal of the home, with possible support through PrimeHouse grants.
Is buying an older home in the south a good move?
Often yes. In the canton of Esch, existing homes (around 6,869 €/m²) stay well below new-build (around 8,573 €/m²). The gap funds renovation, the location is usually better and access to the capital remains reasonable.
Sources
- Eurostat - Construction producer prices or costs, new residential buildings
- Housing Observatory - Sale prices (Le Logement en chiffres no.18, Sept. 2025)
- STATEC - Residential construction prices
- Guichet.lu - Bëllegen Akt tax credit
Further reading: property surveys in Luxembourg, and our buy a property page.
By David Carmo, founder of CARMO Immobilier. A real-estate professional since 2008, board member of the Real Estate Chamber of the Grand Duchy of Luxembourg, member of its disciplinary council, and trainer at the Real Estate Academy.
This article is for information only and does not constitute legal advice. Regulations change and every situation is specific. Before any decision, check the rules in force and consult your notary or an adviser.