Rental investment: What’s the situation with buy-to-let in 2024?

In Luxembourg, the percentage of owner-occupiers is significantly higher than in other European regions and countries. The time when everyone aspired to become a homeowner could be coming to an end, however. This change is driven by rising interest rates, high property values and significant housing costs weighing on household budgets, despite a downward trend in prices due to the crisis that began in early 2022 (war in Ukraine and soaring inflation).

The rental market is expected to continue to grow, providing opportunities for investors, as every tenant needs a landlord.

More and more residents therefore appear to be opting to rent rather than buy, either out of necessity, because they have less access to bank financing or out of choice. This reflects a generational shift, with some favouring long-term rental in order to benefit from greater flexibility and enable them to explore other saving options.

The factors determining the value of a property today should be taken into account when making any investment in the market. Firstly, the energy performance of the individual property or communal building has become decisive, given the movement in energy prices and new standards and regulatory requirements. This is a major issue, as highlighted, for example, by discussions in France on banning the rental of properties that do not meet energy performance criteria. In other words, the value of energy-intensive properties is set to fall rapidly due to potential difficulties finding tenants.