10.05.2022 Finance Luxembourg

The Real-Estate Revolution, a Luxembourg perspective

Article 17 of the EU Charter of Fundamental Rights is dedicated to “the Right to property”. It states that “everyone has the right to own, use, dispose of and bequeath his or her lawfully acquired possessions”. But with high prices and skyrocketing rents, as we can see clearly in Luxembourg, becoming a residential property owner is a real headache. This article assesses the Luxembourg real-estate situation while presenting a few solutions that are about to disrupt the real estate market.

Real Estate in Luxembourg, the impossible equation

According to Eurostat, the cost of buying a home in Luxembourg has more than doubled in the past decade. Since 2018, the prices have increased by more than 10% each year. In a recent poll 82% of Luxembourg voters said they were “greatly worried” about access to affordable housing. And they are right to be concerned. According to the Luxembourg Institute of Socio-Economic Research, an apartment in the Luxembourg city centre typically costs €11,657 per square metre, upwards of €1 million for a two-bedroom (100 square metre apartment).

In March 2022, the International Monetary Fund warned in a special note that urgent action is needed in Luxembourg’s housing market. The note said that “high prices impact the country’s attractiveness as a business location, but are also fuelling high household debt and posing a risk to banks.” Luxembourg Finance Minister Yuriko Backes stated in parliament that banks were not exposed, with fewer than 1.1% of borrowers defaulting on loans. Statec, the Government statistics service of Luxembourg, on its side, said that between 5,500 to 7,500 new units are needed per year to accommodate the grand duchy’s growing population. But only around 4,000 are being built.

So what is the solution? Does this mean that even more of Luxembourg’s population will have to move closer to – or over – the border in France, Belgium, or Germany to afford better housing prices?

Equipped the Real-Estate Colossus with technology feet 

– Invest in the Metaverse to purchase real-life property? 

If I cannot even invest in real life, what is the point of investing in the Metaverse? First of all, as for a real estate investment in real life, a virtual land can be built. Therefore, you can develop a commercial activity such as a store or an art gallery and thus generate income. On the other hand, the plot can be rented. The demand for commercial spaces, but also for virtual private residences, is exploding. Similarly, advertising panels can be installed and rented to advertisers. According to a report by Bloomberg Intelligence, a concert on the Metaverse can generate up to ten times more business than in an actual concert hall for no comparable investment. This was the case with Travis Scott’s Fortnite concert, with a turnover of 20 million dollars. But to make money selling virtual land, you need to detect good locations that have the potential to be resold at a premium price.

That’s what Meta Estate™ has developed. Meta Estate™ is the first real estate agency in the Metaverse. Meta Estate™ has acquired a unique technology and created a simple way for anyone to become a virtual landowner in the Metaverse.

– Real estate ownership with BlochHome, a Luxembourg success story 

BlocHome is a Luxembourg investment platform that enables anyone to invest in the real estate market in a fast, simplified and highly secure way. Starting with 1,000 euros, users can buy and sell their stakes in a few simple clicks via BlocHome Tokens representing shares in the legal entity that owns their growing real estate portfolio. This purchase allows the users to benefit as an owner of both monthly rental income and property appreciation. BlocHome is helping you to build your capital fast enough to purchase a property.

Transforming the Real-Estate Colossus is the promise of completing the real estate digital transformation. With Fintech, Real Estate Tech and Metaverse, we are just at the beginning, but the perspectives are exciting if the speculative bubble does not eat it all.