Sylvie Jacques, regional owner and director of RE/MAX Luxembourg, says prices for houses as well as city apartments have increased as inventory has declined.

Last year home prices increased more than 8.67 percent, and apartments went up 5.47 percent, compared with 2012.

The price escalation puts Luxembourg properties in a league “not far away from top locations in Paris,” said Pascal Feller, managing director and owner of Immofocus, a Luxembourg real estate agency. “It is getting very expensive.”

WHO BUYS IN LUXEMBOURG

As a financial center and headquarters for several European institutions, this multicultural nation draws foreign investors from all over the world, particularly Europe. Sixty-six percent of Luxembourg city residents and 45 percent nationwide are expatriates, representing 74 countries.

“They want to buy in Luxembourg because they know their asset is going to be secured in comparison with other countries,” Ms. Jacques said. With Luxembourg’s banking-secrecy laws poised to end later this year for nonresidents, the number of other Europeans moving to Luxembourg to escape higher taxation is expected to rise.

BUYING BASICS

There is no restriction on foreign buyers. Mortgages have become more difficult to obtain in the last year or two. A 20 percent down payment is needed, Mr. May said. Mortgage payment typically cannot exceed a third of a buyer’s monthly income.

WEBSITES

National tourist office: visitluxembourg.com

Luxembourg city tourist office: lcto.lu

Luxembourg portal: luxembourg.public.lu