By Emilie Di Vincenzo, Independent Journalist

The Luxembourgish Real Estate Dinner, organised by EuroCaution, brought together nearly 250 guests this year, most of them key players in the Luxembourg real estate development sector. Held in the exceptional setting of the GRIDX, the evening — warm, convivial and featuring a seated dinner — offered a unique moment of constructive exchanges. Between high-level networking and open discussions on the profession’s challenges, the atmosphere proved particularly conducive to collective reflection on the future of the residential market.

A hesitant recovery

According to the data presented by EuroCaution, the market is showing signs of a hesitant recovery, best described as “a breeze rather than a wind of change.” Sales of apartments under construction, which had been falling continuously since 2022, show a slight increase in the third quarter of 2025.

In yellow appear the Statec data. The guarantees issued in Q3 and Q4 (green line), recorded as of 20/11/2025, correspond to the number of guarantees granted; a buyer who purchased several units received only one completion guarantee, which explains the gap with the total number of VEFA sales.

This recovery is mainly due to two factors:

• A gradual adjustment of prices, which is helping reconnect supply with demand, particularly from families and workers.
• Progress on construction sites: developers who have already started building are now finding it easier to sell their stock than those whose projects have not yet begun.
• Developers are also offering their clients reinforced protection measures that go beyond usual standards, such as strengthened completion guarantees or specifications including the installation of kitchens and fittings. The aim is to provide buyers with greater security while reducing additional costs.

The end of public subsidies: limited impact on VEFA

Public subsidies, definitively discontinued on 30 June 2025, did not have the expected impact on the sale of VEFA properties. According to EuroCaution, they “did not create significant added value”, with recent transactions involving more public actors or private investors than first-time homebuyers.
The real demand therefore remains disconnected from a supply that is still too expensive, too rigid, or too slow to materialise.

An outdated VEFA regulation: a major obstacle

Another shared observation: the government’s delay in reforming the 1976 law governing VEFA has now become a real obstacle to new development.
Professionals emphasise that the lack of an updated framework unbalances the buyer–developer relationship, slows down sales, and increases distrust in certain segments — even though EuroCaution insists that distrust is not the main reason for low sales, as demonstrated by the numerous recently signed projects.

Aligning supply with demand: an absolute priority

EuroCaution stresses a key point: it is urgent to adapt supply to the market’s real expectations.

Adjusting prices: the role of yield management

A strategy inspired by the hotel and airline industries is recommended: yield management.
Internal analysis shows that a nearly completed new unit can sell for 30 to 34% more than before construction. Conversely, if a project struggles to reach a sufficient level of pre-sales, a price reduction of around 25% would be needed to trigger sales and allow construction to begin.

Firm deadlines to reassure buyers

Meeting deadlines has become a decisive criterion. EuroCaution highlights the importance of a construction support loan — a key instrument for securing the schedule, controlling costs and ensuring on-time delivery.

Mortgage credit and bridge loans: an overly restrictive system

Clients interviewed report frequent bank refusals, often justified by unclear criteria.
The bridge loan, essential for families wishing to buy before selling their current home, remains difficult to access due to a strict interpretation of a CSSF circular.

EuroCaution therefore proposes working on an insurance solution to facilitate access to bridge loans, along with complementary alternatives that will be discussed during an upcoming workshop open to interested professionals.

Strengthening buyer protection: a well-advanced project

Contrary to popular belief, buyer hesitancy does not stem from a lack of confidence in VEFA.
Current guarantees — particularly the financial completion guarantee — play a crucial role.

Since 2022, EuroCaution and its partners have undertaken several major initiatives:

• Drafting a “plain language” completion guarantee, more accessible to consumers.
• Optimising clauses in VEFA contracts.
• Introducing optional guarantees (land coverage, waiver of certain changes, reinforced criteria for guarantee activation).

Soon, the guarantor will have more contractual tools to support co-owners, including the appointment of a property manager and a delegated project manager in the event of developer default.
Lastly, a resale guarantee will soon cover up to €40,000 in costs in the event of a forced resale.

Beyond the GFA: comprehensive support

EuroCaution emphasises that it is not “just a provider of completion guarantees.”
The company also supports developers and public authorities with:

• infrastructure guarantees for municipalities,
• the setup of bonding facilities via E-Cautio, its secure digital platform.

Land financing: a model that must evolve

Financing land without a building permit will remain limited to a minority of players, as is the case in most European countries.
Alternative solutions, such as the RDA, are possible with EuroCaution’s support for the associated guarantees.

Additionally, the company offers banks a credit protection solution on mortgage loans. In the event of borrower default, it covers the difference between the outstanding loan balance and the resale value of the property — a solution that could help stimulate the market.

A market in motion, yet still fragile

The data presented at the Luxembourgish Real Estate Dinner shows a market in transition, where:

• prices still need to adjust,
• public policies must evolve,
• financial tools must be modernised,
• guarantees must continue to be strengthened,
• and collaboration between developers, banks and insurers is becoming essential.

EuroCaution reaffirms its commitment to supporting the sector in meeting these challenges and guiding the industry toward a more robust and sustainable recovery.

An evening marked by exchange, conviviality and collaboration

Beyond the analyses, the evening was a highlight for the real estate development ecosystem.
The 250 guests enjoyed a seated dinner, an inspiring setting and a particularly convivial atmosphere.
The discussions were rich, open and constructive, fostering warm and meaningful networking — reflecting the solidarity and determination of a sector committed to moving forward together.

In a market undergoing transition, this edition of the Luxembourgish Real Estate Dinner confirmed one key point: collective momentum is more essential than ever to develop sustainable solutions and revive residential construction in Luxembourg.