Government launches lower-cost housing scheme

(CS) Work in Luxembourg City? Not currently a home owner? You could qualify for a new government housing scheme offering real estate in Kirchberg at 40 percent below the current average price of 7,150 euros per square metre.

At a presentation on Friday, the Infrastructure and Housing Ministries presented plans to make housing in Kirchberg more affordable, including development projects at three sites for more social housing and properties to be sold at prices below market value.

There are currently around 1,400 housing units in the neighbourhood, which is developing from an office district into a residential area with more shops, restaurants and homes. Some 6,500 housing units are to be added over the coming years, Infrastructure Minister François Bausch explained, also outlining how the tram and new funicular will help connect Kirchberg to the City centre and beyond.

Housing Minister Maggy Nagel meanwhile pointed to the rising cost of real estate in the growing neighbourhood, with current prices for newly-built properties at around 7,150 euros per square metre, according to data analysed by national statistics office Statec.

Developed by the Fonds de Kirchberg, new real estate at three sites across Kirchberg will be split between private developers, social housing and homes sold at prices capped by the government. 

Conditions for buyers

Social housing will be sold at 3,250 euros per square metre, while the regular fixed price has been set at 4,200 euros per square metre. For both reduced-price housing schemes conditions apply.

Social housing will come with a leasehold of 99 years and will only be sold to people benefitting from housing subsidies. Buyers cannot already own another property and have to buy for their own accommodation. Additionally, the SNHBM, the organisation managing the social housing project, has first right to buy when the property goes back on the market.

For homes sold on the market for 4,200 euros per square metre, buyers also need to make the home their primary residence. Only people with their workplace in Luxembourg City are eligible. They cannot already own another home. Here, too, a 99 year leasehold applies and the Fonds de Kirchberg has first right to buy when the property is vacated.

Some of the difference in price could therefore be attributed to the fact that the buying price does not include the ground the property is built on, unlike regular market real estate.

The housing projects currently under development include:

• Quarter du Kiem with 820 new housing units, of which 55 percent will be social housing, including 400 flats and 32 houses, and the rest will go to private developers.
• At Réimerwee east and west, 50 percent of 560 planned housing units will be social housing. Some 75 properties (14 percent) will be sold at the lower rate, with 6 percent reserved for sale to a cooperative and 30 percent (170 units) going to private developers.
• The JFK Sud project of 260 new homes will be 50 percent social housing. Some 55 homes (20 percent) will be sold at 4,200 euros per square metre and the remaining 30 percent will be sold by private developers.

Under the plans, 130 homes will be sold at the government-capped rate of 4,200 euros per square metre by 2020, with over 800 additional homes available under social housing conditions. On the other hand, 635 housing units will be sold at regular prices on the market by private developers.