Luxembourg Minister of Housing; Henri Kox, Minister for Small and Medium-Sized Enterprises; Lex Delles and the Minister of the Economy, Franz Fayot; Credit: MLOG

On Tuesday 20 June 2023, the Luxembourg Minister of Housing, Henri Kox, Minister for Small and Medium-Sized Enterprises (SMEs), Lex Delles and the Minister of the Economy, Franz Fayot, presented a package of measures to support the construction trades and the access to housing.

The measures target SMEs, municipalities and households and were reportedly developed by an interministerial group set up by the government, placed under the direction of the Minister of Housing.

In 2022, the real estate market was strongly affected by economic factors Europe-wide. In the aftermath of the COVID-19 crisis, the war in Ukraine, high inflation (including with regard to raw materials needed in construction) and the subsequent rise in interest rates contributed to a significant slowdown in activity. In Luxembourg too, players in the real estate and construction sectors are expressed concern and believed that their indicators have shown significant and negative movements in recent quarters.

These developments in the residential market are likely to have a negative impact on the construction branch in 2023 and 2024.

Due to the tense situation for a large number of small and medium-sized enterprises in the building and civil engineering sector, whose activity is limited to housing, the government has decided to take the necessary measures to stabilise the job market in the construction sector and to support housing construction.

With a total budget of €150 million, the package of measures decided by the government aims to:

  • restore public confidence in real estate investment, particularly for personal occupancy needs;
  • strengthen the prospects of the construction sector, in particular through additional support in the field of energy renovation;
  • financially support SMEs in their energy transition efforts in terms of their equipment and the development of the professional and technical skills of their employees;
  • support the municipal sector both through added support for renovation projects and through a substantial increase in state aid for the implementation of these measures;
  • accelerate the development of affordable rental housing stock by strengthening close collaboration between the private sector and public developers.

The taskforce set up for this purpose by the government was coordinated by Minister Henri Kox and also consisted of Ministers François Bausch, Taina Bofferding, Franz Fayot, Lex Delles, Georges Engel and Yuriko Backes. Representatives from the Ministry of Energy and Spatial Planning and the Ministry of Environment, Climate and Sustainable Development joined the taskforce during the works.