The housing situation is often described as the number one priority in Luxembourg. However, the Fondation Idea noted the sector has been suffering the same issues for the last decade.
In 2010, Statec studies sounded the alarm, describing the number of homes completed in the country each year was below potential demand, following the increase in the number of private households.
Ten years later, the observation remains the same, with the construction of new housing always lagging behind demand. On the other hand, real estate prices have continued to rise exponentially.
House prices, which also serve as a barometer for the population’s real estate concern, increased by 56% between 2010 and 2019 while the construction price index rose by 19% and the median income by 35% .
The Fondation Idea also gives an example that illustrates this trend well. If in 2010 a small apartment of around 50 square metres cost 11 years of minimum wage, in 2019, it would take 14.5 years of that comparable salary to be able to acquire the same property.
Despite these figures, Luxembourg remains a country of owners, as the rate of ownership is around 70%, thanks to low rates and public spending supporting demand.
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