Affordable housing builder SNHBM posts profit after historic loss

After announcing the first loss in its century-long history in 2023, Luxembourg’s state-owned affordable housing developer Société Nationale des Habitations à Bon Marché (SNHBM), returned to profit last year.

SNHBM posted a modest net profit of €47,600 for 2024 in its latest annual report published on Wednesday, as demand for affordable housing intensifies.

The profit signalled a recovery for the developer after it posted a loss of €5.4 million in 2023. The rebound comes amid a rise in income ceilings for subsidised housing, and government aids aimed at widening access to homeownership.

According to its latest annual report, SNHBM launched 301 new housing units last year and completed 250 homes. An additional 1,092 units are currently under construction across 24 sites nationwide.

Of the 250 homes delivered in 2024, 226 were sold at subsidised prices, while 24 entered the rental market. The units are spread across municipalities including Bissen, Belvaux, Contern, Heiderscheid, Luxembourg-Limpertsberg, Neudorf, Elmen, Sandweiler and Sanem.

SNHBM has also expanded its role as a ‘social landlord’, increasing its rental housing stock to 579 units, up from 483 a year earlier.

The figure is expected to grow further through both new builds and acquisitions from private developers unable to complete projects due to ongoing market pressures.

Sales of subsidised flats picked up pace in 2024, buoyed by a government decision to raise income ceilings.

Households with two children can earn up to €11,300 net per month to qualify for subsidised housing, while the threshold for childless households stands at €7,370.

The widened eligibility criteria has drawn growing interest, with over 7,600 people now registered to buy a subsidised flat, far exceeding the 1,092 units that are currently being constructed.

Demand for rental properties has also continued to grow, according to the report. More than 5,000 people are currently on the waiting list for an SNHBM rental flat.

The organisation is targeting a rental portfolio of 1,000 units in the medium term and aims to construct 400 new flats per year through 2026 and 2027.

Despite the uptick, land availability remains a constraint, the developer noted in a press release to accompany the annual report.

SNHBM’s current land reserves can support the construction of 3,067 units, enough for just under eight years at existing building rates.

“We need enough building land in the medium term to be able to build at the desired rate over the years,” said director Guy Entringe, calling for dialogue with the Housing Ministry to identify and secure new land for development.

In a further expansion of its remit, SNHBM is stepping in to rescue stalled private developments in partnership with the Fonds du Logement. The agency is acquiring incomplete projects affected by the downturn in the construction sector and converting them into affordable units for sale or rent.

SNHBM said it had also noted a shift in buyer behaviour this year, with more clients opting to purchase completed homes rather than buying off-plan, reflecting a more cautious market mindset amid tighter credit conditions.

In 2024, the average sale price of a subsidised flat stood at €4,600 per square metre.

Beyond housing, SNHBM is playing an increasingly active role in the development of several public infrastructure projects.

Current projects include a community centre, nursery, shops and office space in Elmen; municipal offices and underground parking in Mamer; a youth centre in Luxembourg-Cents; and multifunctional facilities in Belval-Nord.