Researchers Suggest Rent Register to Improve Transparency for Tenants in Luxembourg

Prices in Luxembourg’s rental market have risen sharply with the Housing Observatory saying investors will be lured back only when confidence in the construction sector returns while a rental register could help improve transparency for tenants.

The Housing Observatory in two reports published on Tuesday studied different phenomena in Luxembourg’s property market, including the return on investment in the rental market.

Price increases between 2018 and 2022 did not follow traditional supply and demand dynamics, the researchers said, with more investors driven towards residential housing thanks to a depressed real estate market in the office sector thanks to the pandemic and a general lack of high returns in other alternative investments at the time.

Investment landlords competing with people buying primary residences can serve to drive house prices up faster than rents, the report notes.

As a result, a return on investment calculation by the observatory shows that high property prices led to lower returns for investors as rents could not keep step with the increase in the initial cost. Return rates as high as 4.5% in 2025 slipped to 3.04% in 2022.

As purchase prices dropped in the wake of high interest rates over the last two years, investors could return, but price and interest rate stability need to become less volatile, researchers said, and confidence in projects and construction companies must improve.

A rental register for Luxembourg

A second report also published on Tuesday meanwhile examines setting up a rental register similar to that already in place in Germany.

The German rental market is relatively transparent due to the obligation for municipalities with more than 50,000 inhabitants to create a Mietspiegel (rent mirror), which gives a fair and accurate overview of what people are paying in rent in each neighbourhood.

The German register provides a detailed analysis that takes into account factors including quality criteria, surface area, age of property, equipment level, environmental performance and geographical location within the town or city.

However, replicating the German system in Luxembourg would be logistically challenging and time-consuming, the report published on Monday concludes. Some of the steps needed include identifying the best organisation to develop the tool, a survey to gather raw data, analysis of the quality of data gathered, followed by validation steps before releasing the register.

The current 2006 law regulating the rental sector would probably not be adequate and would need replacing or updating before the process can start, the researchers say.

All in all, the Housing Observatory estimates it would take at least four years to set up a German-style register.