Follow-up report on countries that received ESRB warnings in 2016 on medium- term vulnerabilities in the residential real estate sector September 2019

I have the pleasure to send you below a section of the report from the ”European Systemic Risk Board” confirming an overheating of the property market in Luxembourg.

Today i’m not trying to explain the main reasons for the overheating of the market,  also I will just mention one example among  other things, as an increase of the credit rates followed by some departures of some big companies (just an example). The increase in the interest rates is just a question of time, and yes the banks in Luxembourg are extremely exposed on the real estate market in Luxembourg.

With my best regards,

YOUS BUSINESS AND CONSULTING

Luc Schuller | General Partner

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contact@yousconsulting.com

 

2.5 Luxembourg
The key vulnerabilities identified in 2016 were related to high and increasing household indebtedness and to strong growth in house prices. Household debt for house purchases was increasing rapidly and there were some concerns with regard to the tail distributions of lending standards. Household indebtedness was very high relative to income compared with other European countries. House prices were increasing very strongly, reaching unprecedented levels and surpassing income growth.
Household indebtedness has continued to increase rapidly, supported by mortgage lending, with some concerns regarding lending standards. Household debt stood at 171% of disposable income in Q4 2017 and it was up by 12 percentage points compared to three years before. Lending for house purchases continued to grow strongly, by between 6% and 7% annually between 2016 and 2018 (adjusted for sales and securitisations). The most recent data, based on new reporting for 2018, imply that pockets of vulnerabilities related to lending standards may exist.
House prices have continued to grow, but at a slower pace (with dynamics at around 3% in 2018, compared with 6% in 2016), amid existing concerns about overvaluation. However, the long period of RRE price increases is indicative of a build-up of overvaluation. Beyond the low level of interest rates, demand and supply factors such as high net migration and land availability constraints have continued to put pressure on house prices.

DIR WËLLT ÄERT HAUS/APPARTEMENT/STUDIO VERKAFEN ODER VERLOUNEN ? BEI EIS KRITT DIR DÉI BESCHTE BERODUNG YOUS REAL ESTATE BUSINESS & CONSULTING TEL. 691 22 57 57 oder hello@yous.lu

DIR WËLLT ÄERT HAUS/APPARTEMENT/STUDIO VERKAFEN ODER VERLOUNEN ? BEI EIS KRITT DIR DÉI BESCHTE BERODUNG YOUS REAL ESTATE BUSINESS & CONSULTING TEL. 691 22 57 57 oder hello@yous.lu

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Do you plan to sell soon? Your home requires a little cost? Here are three ideas to add value to your home, without having to break the bank.

Clearly, it’s about investing smartly, spending small amounts on jobs that can earn you much more. But what are the areas to be treated first?

Efficient and maintained chassis

This is one of the first criteria for potential buyers, in general: does the house have powerful chassis and well maintained? If you do not have double glazing, consider investing. Not only will your home be more attractive to buyers, it will also require less energy, which will impact both your portfolio and the EPB (Energy Performance of Buildings) certificate. If you have wooden frames, consider giving them a touch of new via a paint or stain: you will extend their life and the appearance of your home will benefit from this youthfulness.

Repaint the facade

This is obviously the first element that potential buyers will see. A small roll is not necessarily very expensive, even if you use a team of professionals, and the result will transform the appearance of your home. Think about it! If your facade is brick, clean it thoroughly, or ask the pros to sand it if it is too advanced.

Kitchen and bathroom

The kitchen is the center piece of the house. It is also a play whose importance is ever more important. So of course, redo a kitchen from A to Z, it imposes a consequent budget. But this is usually found in the selling price. If your home allows it, think of the central island communicating with the living room!

The bathroom, a piece of relaxation par excellence, must be the favorite of potential buyers. No need to spend money, but think of a welcoming, clean place that can be quickly heated.

You can find further information on our website www.yous.eu or under our blog https://yousrealestatenews.com

hello@yous.lu

YOUS REAL ESTATE AND BUSINESS CONSULTING GROUP S.A.

Commercial and Residential Real Estate

 

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+352 691 22 57 57 OU 27 47 81 41
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We thank you for your continuing interest.

LUX REAL ESTATE OVERVALUED BY 6.85%

The rampant rise of Luxembourg property prices is partly down to an overvaluation, an economist at the BCL, Luxembourg’s central bank, has said.

In a report published on 13.02.2018, Sara Ferreira Filipe found that high residential real estate prices have led to an expansion of mortage credit, “which in turn triggers a further price increase”.

This, coupled with a limited supply and high demand from positive migration, “only partly explains the price dynamics of the residential real estate market in Luxembourg,” she wrote.

The tipping point was a “moderate but continued overvaluation of property prices”. Ferreira Filipe estimated the overvaluation at on average 6.85% since the start of 2012, but says the trend decreased over the last few quarters.

The economist further says that a correction of this overvaluation has been slower in Luxembourg than in other countries “at an average rate of 2.2% of the overvaluation each quarter.”

This, she states, means it will take 31.5 quarters (7.8 years) to reset half of the deviation from the fundamental value.

“In comparison correcting the deviation of mortgage credit from its own fundamentals takes only about a quarter,” the economist wrote, adding: “In sum, the results suggest that an imbalance in the mortgage market is corrected faster than in the real estate market.”

Residential real estate prices rose by 40% in Luxembourg from 2006 to 2016. Latest figures on house prices in Luxemborg

 

recorded a 4.9% increase from the third trimester of 2016 to the third trimester of 2017. A joint report from Statec and Liser found that the average price of a family house reached €649,425, an existing flat €5,002/sqm (+4.7%) and a new flat €6,316/sqm (+6.1%).

hello@yous.lu

YOUS REAL ESTATE AND BUSINESS CONSULTING GROUP S.A.

Commercial and Residential Real Estate Group

76/78 Grand-Rue L-1660 Luxembourg
+352 691 22 57 57 OU 27 47 81 41
Facebook | Twitter | http://www.yous.eu

Add us to your address book

Copyright © 2018 Yous Real Estate Group,
All rights reserved. –
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20 most expensive places for expats to rent a home in Europe, 2018 and 2017

Luxembourg City is the 11th most expensive location for rent accommodation in Europe, an annual expat survey has found. 

 

That is down from 9th place last year, according to ECA International, an employee compensation consultancy. The firm said it looked at the cost of renting “an unfurnished, mid-market, three-bedroom apartment in prime areas” of several cities across the globe.

ECA stated that:

“The research compares rental costs in accommodation in areas typically inhabited by expatriate staff in over 240 locations worldwide.”

To carry out its research:

“ECA uses a global network of estate agents, relocation agents and extensive in-house research into worldwide property markets to establish and verify the housing data in the reports.”

In this year’s study, London was by far the most expensive location in Europe, followed by Moscow. A pair of Swiss cities also featured in the top 10.

In addition, ECA reported that:

“One of the highest rent increases in Europe for expats is in Dublin, which enters the top 10 most expensive cities to rent for the first time.”

Eastern European cities such as Prague and Warsaw also saw “sharp increases in rental prices” this year.

hello@yous.lu

YOUS REAL ESTATE AND BUSINESS CONSULTING GROUP S.A.

Commercial and Residential Real Estate Group

76/78 Grand-Rue L-1660 Luxembourg
+352 691 22 57 57 OU 27 47 81 41
Facebook | Twitter | http://www.yous.eu

Add us to your address book

Copyright © 2018 Yous Real Estate Group,
All rights reserved. –

contact@yous.lu

New ArcelorMittal HQ coming to Kirchberg

Winning design by French architects Wilmotte & Associés is for ‘transparent’ building using steel made in Luxembourg.

A 16-floor building – half of which will be offices, the other public space – to serve as ArcelorMittal’s global headquarters is to be built in Kirchberg.

Announcing the plans on Wednesday, the world’s leading steel company will build on a 7,273 square metre site near the Philharmonie.

Around 3,500 sq m will become offices, and the remaining space will be used for a woodland garden, public restaurant and auditorium.

ArcelorMittal CFO Aditya Mittal described the project as an “iconic building” that would be a “showcase for steel”.

The winning design by French architects Wilmotte & Associés is a transparent building using steel made in Luxembourg.

It will have a suspended garden hanging above the centre, where the public will be able to walk along the corridors linking both ends.

ArcelorMittal will occupy around 40% of the building, set for completion by 2021. The rest will be leased out to tenants.

“One of the key things about this building that was important to us was it should be a showcase for steel and a place where the public can enjoy its use and be a great place to work,” Mittal said.

“We want the building to be part of life in Kirchberg.”

The design, selected by a jury, was chosen for its use of visible steel in the design, its sustainability and “contribution of high-quality space”.

Half of the space allocated for the site will be public space, which people can access at any time.

Architect Jean-Michel Wilmotte said the building was “unique” due to its location in the European quarter, its 50% allocation for public use through the restaurant and auditorium and the use of steel as the main component.

Between 5,000 and 7,000 tonnes of steel will be used.

Mittal declined to give an indication of the budget for the building, saying only that it was a “financially appropriate transaction”.

New ArcelorMittal HQ coming to Kirchberg